Full Year 2023 Beam Global Earnings Call

Desmond Wheatley: 2023 was the fourth year in a row of really significant revenue growth at Beam Global, both in percentage and absolute dollar terms. In the fourth quarter of 2023, we generated far more revenue than in any previous quarter in our history. 2023 is the first year in our history during which we've reported a positive gross profit, and we implemented changes and improvements throughout the year and, particularly, in the fourth quarter, which we believe have set us up for an even better 2024.

Desmond Wheatley: 2023 was also perhaps the most significant year in terms of strategic growth for Beam Global with our expansion into what is the largest market in the world for our products, Europe. We continue to improve our intellectual property portfolio with the issuance of several new patents. And we expanded our world-class team with the addition of new operations and finance leadership, a very significant expansion of our engineering team, and a dramatic increase in the size of our manufacturing team, both as a result of our acquisition, with a much more modest increase in overhead and management personnel.

Desmond Wheatley: We did all of this while generating gap gross profits and dramatically reducing our overhead costs as a percentage of our revenue. All your revenues, as Lisa just told you, were over 67 million dollars, which is 300 percent of the 2022 million we generated in the prior year. That was over 200 percent of the nine million we generated in 2021. And that was 150 percent of the six million generated in 2020.

Desmond Wheatley: So you can see that while last year was, on the one hand, just a continuation of several years of dramatic growth, it was by far the most material increase in our history. Q4 revenues of $20 million were also about three times more than the same period in the prior year and more than 10% higher than our previous record quarter, which was the second quarter of 2023. In fact, every quarter in 2023 generated the highest revenue for the same period in any prior year. We were profitable at the gross line for the full year for the first time, reporting $1.2 million, or over 2% positive gross profit for the year.

Operator: Good morning, everyone, and welcome to the Beam Global Full Year 2023 Operating Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Lisa Potok, CFO. Please go ahead.

Good day, everyone and welcome to the beam global full year 2023 operating results conference call.

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After today's presentation there'll be an opportunity to ask questions. Please note. This event is being recorded.

Desmond Wheatley: And it's important to point out that that higher number includes almost a million in non-cash items associated with, for example, amortization of intangible assets as a result of our acquisition. Without those non-cash negative impacts to gross profitability, and they're not cash, and a better guide to how gross profits are improving our cash position, we actually generated over $2 million of gross profits in 2023. We put in place engineering and manufacturing improvements, which should set us up for a very good 2024. In fact, by the end of the fourth quarter, our bond costs for a single EV arc were reduced by about $4,000, or 6% of revenue.

I would now like to turn the conference over to Lisa Poe talk CFO. Please go ahead.

Lisa Potok: Hello, good afternoon, and thank you for participating in Beam Global's 2023 year-end conference call. We appreciate you joining us today to hear an update on our business. Joining me is Desmond Wheatley, President, CEO, and Chairman of Beam. Desmond will be providing an update on recent activities at Beam, followed by a Q&A session.

Lisa Poe: Hello, Good afternoon, and thank you for participating and being global Twenty-twenty three year end conference call.

Lisa Poe: We appreciate you joining us today to hear an update on our business Jordanians, Desmond Wheatley, President CEO and chairman of beam.

Speaker Change: We will be providing an update on recent activities that being followed by a Q&A session.

Speaker Change: But first I'd like to communicate to you that during this call management will be making forward looking statements, including statements that address beams expectations for future performance or operational results.

Speaker Change: Looking statements involve risks and other factors that may cause actual results to differ materially from those statements.

For more information about these risks please refer to the risk factors described in beans. Most recently filed Form 10-K, and other periodic reports filed with the SEC.

Desmond Wheatley: If we produce the same number of EV arc systems in 2024 that we produced in 2023, with no growth in other words, we'd have a gross margin contribution of another $3 million from those improvements alone. To put that in context, we burned about $10 million in cash in 2023. And, of course, there were single items due to the acquisition, new patents, and an ERP rollout, and all the one-time costs associated with those things.

Speaker Change: The content of this call contains time sensitive information that is accurate only as of today.

Speaker Change: April 17th 2024.

Speaker Change: Except as required by law being disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.

Speaker Change: Next I would like to provide an overview of our financial results for <unk> fourth quarter and year ended December 31 2023.

Desmond Wheatley: Remember also that the price increase of 8.5% on EVARC has not yet contributed to our gross margin because we've not yet worked through all the previously contracted backlog, or had not done so anyway at 1231. However, we will start to see the impact of that price increase this year, and when combined with the cost savings I just described, we will be in even better shape. Doing some back of the napkin math, you can see that if we had that price increase on the same number of systems we deployed in 2023, again, with no growth and no contribution from Europe, we could generate another $5 million or so of growth.

Speaker Change: Revenue for the first for the fourth fiscal quarter of 'twenty twenty-three set another new record for the company of $20 million, 154% increase over the $7 9 million reported in Q4 of 'twenty two.

Speaker Change: Revenues for the year ended December of 'twenty, three were a record $67 4 million, which was a 206% increase over the 22 million reported in the same period ending 2022.

Speaker Change: This increase was primarily due to sales to federal state and local customers. As a result of large orders received in late 2022 for the U S Army Veterans Affairs, New York City and more.

Speaker Change: We recorded revenues of $8 5 million for our energy storage business from our 2022 acquisition of all cell technologies and $3 4 million for our new beam Europe subsidiary as a result of the Omega acquisition that closed in October of 2023.

Desmond Wheatley: Combining these improvements with the 2 plus million of growth that we already reported, net of non-cash items, in 2023, we get a gross margin contribution of about $11 million, which is actually 110% of the cash that we burned last year and now the non-cash and extraordinary items. We are clearly on the right track. Again, I appreciate the work of the engineering operation teams who've made these savings happen and the sales team under the leadership of Sandra Peterson for bringing in purchase orders with the new increased pricing. Mark Myers, our new COO, and more about him in a minute, will also impact our gross profit in a positive way by making us more efficient and reducing waste in our operation.

Speaker Change: Our gross profit for the quarter ended December 31 of 23, 1.4 million or 2% of sales compared to a gross loss of <unk> 7 million or 9% of sales in the same quarter of the prior year.

Speaker Change: Gross profit for the year ended December 31 of 23 was $1 2 million or 2% of sales compared to a gross loss of $1 7 billion or 7% of sales in the same period for the prior year.

Speaker Change: As a percentage of sales or 2023 gross profit improved by 9%.

Speaker Change: Excluding the noncash expenses from the 23 gross profit increases the gross profit to $2 1 million.

Desmond Wheatley: As it happens, our new ERP should help with this, as it too makes us more efficient with real-time knowledge of inventory and unit costs. We are striving relentlessly for profitability. We demonstrated in 2023 that we can get there on the gross line. The next target, of course, is the bottom line, and that's firmly in our sights. The lion's share of our revenues continues to be generated through the sale of our EVR product line, but we also receive significant contributions from our battery business and just the beginnings of contributions from our new European entity, Beam Europe. Although our products and technology are highly complex, our business is actually very simple.

Speaker Change: The gross profit has improved due to the increased production levels, which resulted in favorable fixed overhead absorption and improved labor efficiency as well as design changes that were implemented during the year, reducing the unit cost of the EV arc.

Speaker Change: Our operating expenses were $5 5 million for the fourth quarter of 23 compared to $7 1 million for the same period in 'twenty two.

Speaker Change: Operating expenses for the year end December 31, 23 were $17 5 million or 26% of revenues compared to 18 million or 82% of revenues for the same period in 2022.

Desmond Wheatley: We buy raw materials and components, we convert those into products, and we sell those products. A tripling of revenue means a tripling of production. The Beam Team manufactured over $60 million worth of products from the same facilities and with minimal capital expenditure that had produced just $6 million worth the same three years earlier. I've often said that Beam Global has significant operating leverage, and our 2023 results certainly prove that. Even though we tripled our business in 2023, we actually reduced our operating expenses over 2022. And our 2023 net was a 64% improvement over our 2022 net.

Speaker Change: The 23 expenses decreased by 56% as a percentage of revenues.

Speaker Change: The reduction of expenses in 'twenty three included a $5 3 million decrease from what was recorded in 2022 related to the fair value of contingent consideration expense for also acquisition.

Speaker Change: Operating expense increases included commission expense related to the increase in sales. The addition of expenses for our new Omega acquisitions and salaries and consultants.

The net loss $5 1 million or 36 cents per share for the fourth quarter of 23 compared to $7 8 million or <unk> 77 cents per share for the fourth quarter of 'twenty two.

Desmond Wheatley: Undeniably, the long-term trends that Beam Global is charting are growing revenues, improving gross margins, and a significant reduction in overhead costs as a percentage of revenues. In short, we're creating a better and better company with continuing improvements to our fundamentals. At the end of 2023, we had over $10 million of cash in the bank and almost $40 million of current assets made up of cash, accounts receivable, prepaid expenses, and inventory, all of which are essentially cash to us.

Speaker Change: The net loss for the full year of 23 was $16 1 million or $1 30 per share compared to $19 7 million or $1 99 per share for the same period in 2022.

Speaker Change: As for our cash balance at December 31, 23. It was $10 4 million. This is compared to one 7 million at December of 'twenty two.

Speaker Change: Our cash increases resulted from our capital raise in June of 'twenty, three offset by increased accounts receivable cash payments for the acquisition and operating losses.

Speaker Change: Our working capital increased from $6 8 million to $23 8 million from December 31 of 22 to December 31 of 23.

Desmond Wheatley: Because, as I stated previously, we have a simple business, and we convert inventory and receivables quickly and without complication into cash. Our $40 million of current assets was offset by under $17 million of current liabilities, leaving us with over $23 million of unburdened cash and stuff that will turn into cash within the next few months.

Speaker Change: As a result of the increase in cash as well as accounts receivable and inventories, resulting from the increased orders and revenues.

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

Speaker Change: Yeah.

Desmond Wheatley: Okay. Thank you very much Lisa and thanks to all of you for joining being global is 2023 earnings call.

Desmond Wheatley: We continue to use our balance sheet as a powerful and useful tool, which is helping us improve our margins through strategic purchasing and the creation of certain types of inventory to smooth our production process and timing, which in turn reduces our direct costs per product produced. This is particularly true in our European operations, where the legacy business we acquired has been more seasonal than has typically been the case with our clean technology products.

Desmond Wheatley: There's a great deal to go through so I'm going to talk quickly.

Desmond Wheatley: To be sure to leave some time for questions. After my prepared comments.

Desmond Wheatley: First let me start my apologize in the World of late with this earnings call, but we did file within the extension period, and we're not actually late with our filings.

Desmond Wheatley: So apologize for the short notice.

Desmond Wheatley: We've been working very hard to get those filings.

Desmond Wheatley: Didn't want to notice the call until we were certain although we were going to do that of course.

2023 was a very busy year for us with many initiatives coming to ahead in the fourth quarter, which have created a lot of extra hard labor frankly, where the filing of our 10-K was concerned let.

Desmond Wheatley: In Europe, we've already been able to flatten our seasonal production fluctuations by leveraging our balance sheet to create inventory of commonly purchased items. This allows us to maintain a steadier production cycle, lowering labor costs per product produced, and also to deliver to customers faster when that seasonal buying increases again in later quarters. Our net loss of just over $17 million in 2023 included around $7 million of non-cash and one-time items, meaning that we actually burned around $10 million of cash during the year, or about $2.5 million per quarter.

Desmond Wheatley: Let me reassure you that there was nothing controversial about it.

Desmond Wheatley: It's just that we have a new CFO, a new accounting team joining our bathrooms, a new auditor are New York P and an international acquisition, which all hits in the fourth quarter.

Desmond Wheatley: Now while all of these things are being planned and are frankly very good for the company. It was never our intention to take them all on at the same quarter on shortly.

Desmond Wheatley: Fourth quarter.

Desmond Wheatley: However, things turning out as they inevitably do that's where we ended up.

Desmond Wheatley: We've had to deal with it.

Desmond Wheatley: Dividing that two and a half million dollars a quarter into the 23 million or so of cash and stuff that will turn into cash, you can see that even without generating any more gross profit, we have plenty of runway to continue executing on our strategic plan. But the fact is that we are generating gross profit and improving it at that. Every dollar of gross that we generate is one less dollar of cash burn, and the Beam team intends to continue in its relentless pursuit of cost reductions, improved efficiencies, and higher revenue per employee. Our revenue growth and gross profit improvement are not adjusted or pro forma, and nor is our path to EBITDA positive, which becomes clearer and more tangible each time we report. We will remain debt free.

Desmond Wheatley: We might have been able to deal with it more quickly I suppose but part of what makes being global such a great company is that we're very cost conscious and we do not have large teams of people sitting around waiting for these sorts of eventualities, we don't break it very lean and tight ship. So when we have extraordinary requirements, our small but highly effective team has to go into overdrive to <unk>.

Desmond Wheatley: Form what is required.

Desmond Wheatley: So looking at the time, but is this sort of discipline, which keeps our overheads low and enables us to get more done than any other company I know of with such a very small overhead.

Desmond Wheatley: I want to thank Lisa and her team are new C. All more bars and the operations team and all the other members of the being global team, who have helped and actually mark them as well our new auditors are forgetting to this without cutting any corners.

Desmond Wheatley: Work seven days, a week long hours to bring us to this point, where we're filing on time and with quality and integrity I'm proud of them and I appreciate all that they do.

Desmond Wheatley: And our $100 million line of credit is still active and available to us in the event that we need it to fund very large new orders. While we've reduced our overhead costs and percentage of revenues, we certainly have not reduced our efforts and investment in strategically growing the company, improving our technology, and continuing to grow our IP portfolio. In 2023, we were granted a new patent for wireless electric vehicle charging, powered by renewable energy, which will enable motorists in the future to simply drive on to our products and walk away while their vehicle is filled with renewable energy without them even needing to plug in. However, automobile manufacturers need to include receivers on the underside of their vehicles to take advantage of this fantastic technology.

Desmond Wheatley: 2023 was the fourth year in a row of really significant revenue growth had been global both in percentage and absolute dollar terms.

Desmond Wheatley: In the fourth quarter of 2023, we generated far more revenue than in any previous quarter in our history.

2023 is the first year in our history during which we reported a positive gross profit and we've implemented changes and improvements throughout the year and particularly in the fourth quarter, which we believe sets us up for an even better 2024.

Desmond Wheatley: 2023 was also perhaps the most significant year in terms of strategic growth for being global with our expansion into what is the largest market in the world for our products Europe.

Desmond Wheatley: We continue to improve our intellectual property portfolio with the issuance of several new patents and we expanded our world class team with the addition of new operations and find out his leadership, a very significant expansion of our engineering team and a dramatic increase in the size of our manufacturing team. Both as a result of our acquisition with a much more modest increase in.

Desmond Wheatley: But I have little doubt that once consumers understand that this capability exists, they will demand it, and Beam Global will be in a perfect position to provide not just the fastest deployed, most rapidly scalable electric vehicle charting infrastructure but also the most convenient interface for the consumer. We were also granted several patents in Europe this year for our EV arc and battery products and, perhaps most notably, for our EV standard curbside charging solution.

Desmond Wheatley: Overhead and management personnel.

We did all of this while generating GAAP gross profits and dramatically, reducing our overhead cost as a percentage of our revenues.

Desmond Wheatley: Full year revenues as Lisa just told you were over $67 million, which is 300% of the 2000 22 million we generated in the prior year.

Desmond Wheatley: That was over 200% of the 9 million, we generated in 2021 and that was 150% of the 6 million generated in 2020. So you can see that while last year was on the one on just the continuation of several years of dramatic growth. It was by far the most material increase in our history.

Desmond Wheatley: I'll talk more about EV Standard later in my comments when I expand on the fantastic things that are happening at our European facilities. Finally, we have received patents in China and in India related to our unique and proprietary thermal management technology, which makes lithium ion batteries safer, capable of faster charging, and more energy dense. We've made some material and highly impactful changes and additions to our management team during the last couple of quarters, but we've done it with a level of discipline and responsibility that you should have become used to if you've been following Beam Global for any length of time. In the fourth quarter, Lisa Potok joined us as our new CFO. You just heard from her.

Desmond Wheatley: Q4 revenues of $20 million or also about three times more than the same period in the prior year, a more than 10% higher than our previous record quarter, which was the second quarter of 2023.

Desmond Wheatley: Every quarter in 2023 generated the highest revenue for the same period in any prior year.

Desmond Wheatley: We were comfortable with the gross line for the full year for the first time reporting $1 $2 million or over 2% positive gross profit for the year.

Desmond Wheatley: And it's important to point in talking about higher number includes almost 1 million of noncash items associated with for example, amortization of intangible assets as a result of our acquisition.

Desmond Wheatley: Without those noncash negative impacts to gross profitability and they're not cash and a bunch of guide to how gross profit through improving our cash position, we actually generated over $2 million of gross profits in 2023.

Desmond Wheatley: Lisa has extensive experience and a solid history of executive finance roles at large public, private, and international companies. Most recently, she was the CFO of a $500 million revenue international manufacturing company. She's growth-oriented and has brought a small but very effective team of finance professionals with her. She's also very experienced in ERP integrations. Something of great value to us is that we're currently integrating an ERP across the entire company. Lisa and our accounting team have the chops to take us to the next level.

Desmond Wheatley: We put in place engineering, and manufacturing improvements, which should set us up for a very good 'twenty 'twenty four in fact by the end of the fourth quarter, our Bom cost for a single b or have reduced by about $4000 or 6% of revenue.

Desmond Wheatley: If we produce the same number of <unk> systems in 2024 that we produced in 2023 no growth in other words, we would have a gross margin contribution of another $3 million from those improvements alone.

Desmond Wheatley: With that in context, we burned about $10 million cash in 2023.

Desmond Wheatley: They've certainly had a baptism of fire, taking over at a time when we're implementing that new ERP, integrating an international acquisition, and transitioning, as previously announced, from our previous auditors to our new firm, Markham. All of these things were planned, but I'm bound to say that it was not my intention that they should all take place in a fourth quarter and with the requirement to file a 10-K rather than separately over several quarters with the less burdensome 10-Q process. Still, the team has risen to the challenge.

Desmond Wheatley: And of course, they were single items due to the acquisition new patents in an ERP rollout and all of the onetime costs associated with those things.

Desmond Wheatley: Remember also that the price increase of 8.5% on E. V arc has not yet contributed to our gross margin because we have not yet worked through all the previously contracted backlog or had no anywhere at 12 31. However, we will start to see the impact of that price increase this year and when combined with the cost savings I. Just described we will be in even better shape.

Desmond Wheatley: Doing some back then that can bus you can see that if we'd had that price increase on the same number of systems redeployed in 'twenty three again no growth no contribution from Europe, we generate another 5 million or so dollars of gross.

Desmond Wheatley: We have our European expansion, we have our ERP, and we filed our 10-K within the allotted time. Another very significant improvement to our leadership team was the addition of Mark Myers, our new COO. We've previously operated without a chief operating officer, and there was a time when that was appropriate and even prudent when we were a much smaller organization with much lower production and revenue. We are now a truly international organization with very significant growth in revenues and production; operational excellence and increased efficiencies across the company are more important to us than they've ever been. Having a competent person in this role might be the single most important factor in our continuing and relentless pursuit of improved profitability. Mark is certainly qualified. He's a machine.

Desmond Wheatley: Combining these improvements with the two plus million gross that we already reported that said non cash items in 2023.

Desmond Wheatley: Gross margin contribution of about $11 million, which is actually a 110% of the cash that we actually burned last year.

Desmond Wheatley: The noncash and extraordinary items.

Desmond Wheatley: Clearly on the right track.

Desmond Wheatley: Again I appreciate the work of the engineering and operations teams, who have made these savings happen and the sales team under the leadership of Thunder Peterson for bringing in purchase orders with the new increased pricing.

Desmond Wheatley: Myers, our new C O and more about him in a minute will also impact our gross profit in a positive way through making us more efficient and reducing waste in our operations.

Desmond Wheatley: It happens our new ERP should help with this is it too it makes us more efficient with real time knowledge of inventory and unit costs.

Desmond Wheatley: We are striving relentlessly for profitability.

Desmond Wheatley: He has held senior executive positions in both U.S. and international manufacturing companies. He was a senior consultant at McKinsey, and prior to that, he had a distinguished career in engineering in the U.S. Nuclear Navy. Many of you will know that I went to see him as a young man, and I can tell you that, on a personal level, I'm delighted to have a chief operating officer who shares that experience with me. But I can't help pointing out that I was one of the sane sailors that stayed above the surface of our oceans while Mark was one of the crazy ones who was a nuclear submariner did something that I would never have

Desmond Wheatley: We demonstrated in 2023 that we can get the gross line. The next target of course, its bottom line and that's firmly in our sights.

Desmond Wheatley: The lion's share of our revenues continued to be generated through the sale of our E. B R product line, but we also received significant contributions from our battery business.

Desmond Wheatley: The beginnings of contributions from our new European entity being Europe.

Desmond Wheatley: Although our products and technology are highly complex our business is actually very simple.

Desmond Wheatley: We buy raw materials and components, we convert those into products and we sell those for us.

Desmond Wheatley: A tripling of revenue means a tripling of production.

Desmond Wheatley: The BMT manufactured over $60 million worth of products from the same facilities and with minimum minimal capital expenditure, but it produced just 6 million worse the same three years earlier.

Desmond Wheatley: Mark's only been with us for a few months, but the impact of his activities is clear and highly visible in our U.S. facilities. The way our team is operating, it improves safety, reduces waste, and the sort of increased efficiencies which are essential to our continuing improved profitability. I'm absolutely delighted to have him on board, and so should anybody who's invested in this company. These ads are also excellent business continuity contributors in the, I hope, unlikely event that anything ever happens to me. Leadership. Thank you.

Desmond Wheatley: I've, often said that being global has significant operating leverage and our 2023 results certainly prove that.

Desmond Wheatley: Even though we tripled our business in 2023, we actually reduced our operating expenses over 2022, and our 2023 net was a 64% improvement over our 2022 net.

Desmond Wheatley: Undeniably the long term trends that being global is charting our growing revenues improving gross margins and a significant reduction in overhead costs as a percentage of revenues and sure we're creating a bathroom Bachelor company with continuing improvements to our fundamentals.

Desmond Wheatley: At the end of 2023, we had over $10 million of cash in the bank and almost $40 million of current assets made up of cash accounts receivable prepaid expenses and inventory all of which are essentially cashed to us because as I stated previously we have a simple business and we convert inventory and receivables quickly and without complication into cash.

Desmond Wheatley: Thank you. Is qualified to and capable of continuing to operate and grow as a global company without, By the way, I hasten to add that I'm fighting fit and I'm still full of enthusiasm and excitement for what we're doing and our growth prospects. I'm not going anywhere, but it makes good sense to have depth and diversity in the leadership team no matter what happens. At the board level, Tony Possowatz, Peter Davidson, and I continue to serve, and we've added two excellent new members. In December, Judy Crandall joined our board.

Our $40 million of current assets was offset by under $17 million of current liabilities, leaving us with over $23 million of unburden cash and stuff that will turn into cash within the next few months.

Desmond Wheatley: We continue to use our balance sheet is a powerful and useful tool, which is helping us improve our margins through strategic purchasing and the creation of certain types of inventory to smooth our production process and timing, which in turn reduces our direct cost per product produced this.

Desmond Wheatley: Judy came to me with excellent references from the banking and investment community. In fact, I first met her because she was, and continues to be, an investor in Beam Global. I was so impressed by the due diligence questions that she asked, combined with the clear insight she had into the opportunities that the company enjoys, and also what needs to be done to grow shareholder value while complying with corporate governance requirements, that I asked her if she would be willing to join the board and serve as our Audit Committee Chair. She accepted, and we're now benefiting from her more than 20 years of financial, operational, and investment experience. Judy served as the CFO of both public and private companies.

Desmond Wheatley: This is particularly true in our European operations, where the legacy business. We acquired has been more seasonal than it has typically been the case with our clean technology products.

Desmond Wheatley: In Europe, we've already been able to flatten our seasonal production fluctuations by leveraging our balance sheet to create inventory of commonly purchased items.

Desmond Wheatley: This allows us to maintain a steady a production cadence lowering labor cost per product produce and also to deliver to customers faster when not seasonal buying increases again in later quarters.

Desmond Wheatley: Our net loss of just over $17 million in 2023 included around $7 million of noncash and onetime items, meaning that we actually burned around $10 million of Joshua in the year or about two and a half million dollars per quarter.

Desmond Wheatley: Dividing that two and a half million dollars a quarter into the $23 million or so of cash and stuff that will turn into gosh, you can see that even without generating any more gross profit with plenty of runway to continue executing on our strategic plan.

Desmond Wheatley: She has board experience at both public and private companies, including the banking sector. And, of course, she's an active investor. As I mentioned, Beam is a big part of her portfolio. That's true of all of our directors, by the way.

Desmond Wheatley: But the fact is that we are generating gross profits and improving gross profits of that.

Desmond Wheatley: Every dollar of gross that we generate as one last dollar of cash burn and the beam team intends to continuing its relentless pursuit of cost reductions improved efficiencies and higher revenue per employee.

Desmond Wheatley: I'm delighted to have her on board and very much appreciate the leadership and hard work that she brings to the Audit Committee. Also, in December of 2023, George Salantavos joined our board. George is the first European member of our board, and we're delighted to have him as, of course, Europe is now a very large area of focus for Beam Global. George has over 35 years of experience in corporate finance, strategic planning, corporate boards, governance, and entrepreneurship.

Desmond Wheatley: Our revenue growth and gross profit improvement are not adjusted or pro forma nor is our path to EBITDA positive, which becomes clearer and more tangible each time we report.

Desmond Wheatley: We remain debt free.

Desmond Wheatley: And our $100 million line of credit is still active and available to us in the event that we need it to fund very large new orders.

Desmond Wheatley: While we've reduced our overhead costs as a percentage of revenues, we certainly have not reduced our efforts and investment in strategically growing the company, improving our technology and continuing to grow our IP portfolio.

Desmond Wheatley: He's most unusual in that while his operational business dealings have largely been in Europe and Asia, he's also well known and respected on Wall Street and has excellent public company experience, creating, growing, and funding public companies and also acting as a CFO. George is based in Athens, Greece, and has excellent connections where infrastructure is concerned across Europe. Greece is, of course, a highly attractive market for Beam Global products, and I'm looking forward to making a business development tour with George later this year. Both George and Judy have top-shelf experience in public company listings, the capital markets, and M&A.

Desmond Wheatley: In 2023, we were granted a new patent for wireless electric vehicle charging powered by renewable energy, which will enable more trust in the future to simply drive onto our products.

Desmond Wheatley: Walk away, while the vehicle is filled with renewable energy without them, even needing to plug in.

Desmond Wheatley: They also mobile manufacturers need to include the receivers on the underside of their vehicles to take advantage of this fantastic technology, but.

Desmond Wheatley: But I have little doubt that once consumers understand that this capability exists they will demand it and being global will be in a perfect position to provide not just the fastest deployed most rapidly scalable electric vehicle charging infrastructure.

Desmond Wheatley: But also the most convenient interface for the consumer.

Desmond Wheatley: We were also granted several patents in Europe. This year for our <unk> and battery products and perhaps most notably for our T V standard curbside charging solution.

Desmond Wheatley: They went through a significant vetting process with all the typical formalities. And equally important, perhaps, there's an excellent cultural fit amongst all of our board members who are driven by the same goals: Beam Global's success. So we're continuing to grow a world-class team, both at the board level and also at the executive and management level. Our operations teams in San Diego, Chicago, and Serbia are demonstrating that they can get better and better at what we do while reducing costs and improving our gross profit.

Desmond Wheatley: I'll talk more about you'd be standard later in my comments when I explained on the fantastic things that are happening at our European facility.

Desmond Wheatley: Finally, we also received patents in China and in India related to our unique and proprietary thermal management technology, which makes the lithium ion batteries safer capable of faster charging and more energy dense.

We've made some material and highly impactful changes and additions to our management team during the last couple of quarters, but we've done it with the level of discipline and responsibility, which you should have become used to if you've been following being global for any length of time.

Desmond Wheatley: Of course, selling our products is the first vital input to our equation for success. There's been a great deal of negative press about the adoption of electric vehicles and their potential future over the last several months. When you look at the actual data, it tells quite a different story. It's certainly true that the percentage rate of growth of EV sales is not accelerating as quickly as it was in 2023. However, these percentages are being measured against far larger absolute numbers.

Speaker Change: In the fourth quarter or at least support joined us as our new CFO you just heard from her.

Speaker Change: Lisa has extensive experience and a solid history of executive finance roles at large public private and international companies.

Recently, she was the CFO of about $500 million revenue International manufacturing company.

Speaker Change: She is growth oriented and has brought a small but very effective team of finance professionals with her.

Speaker Change: She is also very experienced in ERP integrations something of great value to us as we're currently integrating an ERP across the entire company.

Desmond Wheatley: And a slowing of growth is not the same as a decline, although you might be forgiven for thinking that that was what was going on if you're relying on the media to form your opinion. Year over year electric vehicle sales growth in 2023 was about 50%. It's currently forecast by the experts to be greater than 30% increase in 2024, again, with much larger absolute numbers.

Speaker Change: Lisa and our accounting team have the chops to take us to the next level.

Speaker Change: It's certainly not a baptism of fire taking over at a time when we're implementing new our ERP integrating an international acquisition and transitioning its previously announced from our previous auditors joined you for our market.

Speaker Change: All of these things where clients, but I'm going to say it was not my intention that they should all take place any fourth quarter and was the requirement to file a 10-K, rather than separately over several quarters with the less burdensome 10 cube process.

Desmond Wheatley: In fact, in the first couple of months of this year, EV sales growth was just under 70%. And I know that Ford, one of the companies often singled out in these stories about slowing EV growth, just announced that they had over 80% growth in EV sales in the first quarter of 2024. It's a funny sort of decline that keeps delivering all these double-digit percentage year-over-year growth numbers.

Speaker Change: The team has risen to the challenge we have our European expansion, we have our ERP and we filed our 10-K within the allotted time.

Speaker Change: Another very significant improvement to our leadership team is the addition of Mark Myers, our new C O O.

Speaker Change: We've previously operated without a chief operating officer.

Speaker Change: What was the time when that was appropriate and even prudent when we were much smaller organization with much lower production in revenues.

Desmond Wheatley: There's also been a lot of talk about whether or not consumers want electric vehicles or hybrids. Certainly, hybrid sales have been increasing dramatically over the last year. But I don't think this means that people don't want electric vehicles. In fact, I think it's the opposite.

We are now a truly international organization with very significant growth in revenues and production.

Speaker Change: Operational excellence and increase efficiencies across the company are more important to us than they've ever been.

Speaker Change: Having a competent person in this room might be the single most important factor in our continuing and relentless pursuit of improved profitability.

Desmond Wheatley: I think this is a strong indication that they do, in fact, want electric vehicles, but they're worried that because of the lack of electric vehicle charging infrastructure, they need to buy a hybrid vehicle that can continue even if they're unable to charge. Well, Beam Global is in the business of providing the infrastructure that they will need to get them into battery-electric vehicles. And no matter what you might read in certain sections of the media, I don't think there's any real doubt anymore that electric vehicles are going to take over during the next couple of decades.

Mark Myers: Mark is certainly qualified.

Speaker Change: He's a machine.

Speaker Change: He has held senior executive positions in both U S and international manufacturing companies. He was a senior consultant at Mckinsey and prior to that had a distinguished career in engineering in the U S nuclear Navy.

Speaker Change: Many of you don't know that I went to see as a young man and I can tell you that on a personal level I'm delighted to have a chief operating officer, who shares that experience with me, although I kind of pointing out that I was one of the same sailors ive stayed above the surface of our oceans, well Mark was one of the crazy ones.

Speaker Change: There are some men or did something that I would never have done.

Speaker Change: Mark has only been with us for a few months, but the impacts of its activities are clear and highly visible in our U S facilities.

Desmond Wheatley: I also believe that electric vehicle charging infrastructure will spend the next many years playing catch up with electric vehicle sales, simply because it's easier to put consumers into electric vehicles than it is to put electric vehicle chargers into the environment. That means that as we see the inevitable unevenness in consumer adoption rates of electric vehicles, we ought to see a more consistent and continued level of demand for the charging infrastructure, which will be required to power them all. We are still seeing strong demand for electric vehicle charging infrastructure. Our pipeline currently stands at about 150 million. It's up again.

Speaker Change: The way our team is operating and improved safety reduction of waste and the sort of increased efficiencies, which are essential to our continuing improved profitability I'm absolutely delighted to have him on board and associate anybody who's invested in this company.

Speaker Change: These ads are also excellent business continuity contributors and the I hope unlikely event than anything ever happens to me.

Speaker Change: The leadership.

Speaker Change: <unk> is.

Is qualified and capable of continuing to operate and grow being global without me.

Speaker Change: By the way I hasten to add that I'm fighting fit and I'm still full of enthusiasm and excitement for what we're doing and our growth prospects I'm not going anywhere, but it makes good sense to have depth and diversity of the leadership team no matter what happens.

Desmond Wheatley: All of that pipeline is currently derived from the U.S. market. We're not yet including European pipeline numbers because we're just getting our feet under us in terms of selling into that market. Although we've already had very notable and material successes. In March, we announced that we'd been awarded our first European government supplier agreement on the UK's Crown Commercial Services, which is the main purchasing vehicle for the UK government and... This is essentially the same as the GSA contract that we have with the federal government in the United States and not dissimilar to the contracts that we have with states like California.

Speaker Change: At the board level 20 parcel lots, Peter Davidson and I continue to serve and we've added two excellent new members.

Speaker Change: In December Judy Crandall joined our board.

Speaker Change: Judy came to me with excellent references from our banking and investment communities.

Speaker Change: Actually our first match her because she was and continues to be an investor in being global.

Speaker Change: I was so impressed by the judicial Urgence question says she asked.

Speaker Change: Bind with the clear insights you have into the opportunities that the company enjoys and also what needs to be done to grow shareholder value, while complying with corporate governance requirements that I asked if she would be willing to join the board and served as our audit Committee chair.

Desmond Wheatley: These contracts allow government entities to buy our products without having to go through any further commercial due diligence or competitive purchasing programs. All of that analysis and competition is undertaken before they grant the contracts to us. And once the contracts are in place, we're able to sell our products to them in a streamlined manner. It's not easy to win these contracts, but it's very clearly a good strategy for us, as demonstrated by the tremendous growth that we've had in both federal and state sales over the last couple of years.

Speaker Change: She accepted and we're now benefiting from her more than 20 years of financial operational and investment experience.

Speaker Change: Judy served as the CFO of both public and private companies. She has broad experience in both public and private companies, including the banking sector and of course. She is an active investor as I mentioned beam is a big part of our portfolio.

Speaker Change: True of all of our directors by the way.

Desmond Wheatley: Now we have our first such agreement in place in Europe, and I feel confident that it won't be our last. I feel equally confident that these types of contract vehicles will deliver the same sort of growth and performance for us in Europe as they have done in the United States. In fact, the conditions in Europe could be considered to be a good deal more fertile for our products than they are here.

Speaker Change: I'm delighted to have our own board and very much appreciate the leadership and hard work that she brings to the audit Committee.

Speaker Change: Also in December of 2023, George <unk> joined our board.

Speaker Change: George is the first European member on our board and we're delighted to have them as of course Europe is not a very large area of focus for being global.

Speaker Change: George has over 35 years of experience in corporate finance strategic planning corporate boards governance and entrepreneurship.

Desmond Wheatley: Shortly after we announced that we'd been awarded this contract, we announced the first purchase order from the United Kingdom's Ministry of Defense, which was written against this contract. The purchase order was for a million dollars worth of EV arcs and an art mobility trailer, which will be produced in our Serbian facilities and shipped to the British Army for their overseas bases on the island of Cyprus. This is an absolutely fantastic win for us and I believe it is a harbinger of a great deal more to come.

Speaker Change: It's also unusual in that while there's operational business dealings have largely been in Europe and Asia is also well known and respected on Wall Street, and that's excellent public company experience, creating growing and funding public companies and also I think as the CFO.

Speaker Change: Georgia based in Athens, Greece, and has excellent connections where infrastructure is concerned across Europe.

Speaker Change: This is of course, a highly attractive market for being global products and I'm looking forward to making a business development to have George later this year.

Desmond Wheatley: It took us five years to get our first million-dollar contract in the United States, but it's taken us less than five months to get it in Europe. I was already very enthusiastic about our acquisition in Europe before we received this purchase order. I am no less enthusiastic now that we're already producing and selling our EVR products in that massive market. The Beam Team has been selling well in the United States as well.

Both Georgia, and Judy have talk shelf experienced public company listings, the capital markets and M&A.

Speaker Change: They went through a significant vetting process with all the typical formalities and equally important perhaps there is an excellent cultural fit amongst all of our board members, who are driven by the same goals being global success.

Speaker Change: So we're continuing to grow our world class team both at the board level and also at the executive and management level.

Our operations teams in San Diego, Chicago in Serbia are demonstrating that they can get better and better at what we're doing while reducing costs and improving our gross profits.

Desmond Wheatley: Though we've not recently received another very large order like the $30 million purchase order we got from the U.S. Army a couple of years ago, I do believe that it's likely to happen again and again and again.

Speaker Change: Of course, selling our products as the forced vital input to our equation for success.

Speaker Change: Well, it's been a great deal of negative press about the adoption of electric vehicles and there are potential future during the last several months.

Desmond Wheatley: In the meantime, the sales team has been bringing lots of excellent though smaller orders. This is clearly evidenced by the fact that we have over $150 million in pipeline today and that we had over $20 million in contracted backlog at the end of 2023, having revenue just under $70 million during that year. Put those two together, and you get about 90 million contracts.

Speaker Change: When you look at the actual data it tells quite a different story.

Speaker Change: It's certainly true that the percentage rate of growth of EV sales, it's not accelerating as quickly as it was in 2023. However, these percentages are being measured against far larger absolute numbers.

Speaker Change: And a slowing of growth there's not the same as the decline although you might be forgiven for thinking that that was what was going on if you're relying on the immediate form your opinions.

Desmond Wheatley: And again, from the U.S. only, European sales are ahead of us. However, we do still expect lumpiness in our order cadence as the EV charting industry continues to evolve. From time to time, I believe we'll receive very large orders, which will drive up our backlog. As we become more efficient and are able to deliver more units faster, we should expect to see that backlog come down, offset by the steady flow of purchase orders that the sales team is bringing in. Short-term lumpiness does not, in any way, make me anticipate anything but long-term growth.

Speaker Change: Year over year electric vehicle sales growth in 2023 was about 50%.

Speaker Change: Currently forecast by the exports to be greater than 30% increase in 2024.

Again with much larger absolute numbers.

Speaker Change: In fact in the first couple of months of this year EV sales growth was just under 70% and.

Speaker Change: And I know the Ford one of the companies often singled out in these stories about slowing Eagles, just announced that they had over 80% growth in EV sales in the first quarter of 2024th.

Desmond Wheatley: And the most effective way for us to offset this lumpiness in sales cadence is to continue to diversify our customer base and product offerings. And that is exactly what we're doing. Our acquisition in Europe has opened up the largest market in the world for our products, and we've already demonstrated our ability to sell into that market. Bringing new products like EV Standard to market will create opportunities for large and small orders, which would further stabilize and reduce the lumpiness and order cadence.

Speaker Change: It's funny sort of decline that keeps delivering all these double digit percentage year over year growth numbers.

Speaker Change: There's also been a lot of talk about whether or not consumers want electric vehicles or hybrids.

Speaker Change: Certainly hybrid sales have been increasing dramatically during the last year, but I don't think this means that people don't want electric vehicles, but I think it's the opposite.

I think this is a strong indication that they do in fact want electric vehicles, but they're worried that because of lack of electric vehicle charging infrastructure they need to buy a hybrid vehicle that can continue even if theyre unable to charge.

Speaker Change: Well being global is in the business of providing the infrastructure they will need to get them into battery electric vehicles and no matter, what you might read in certain elements of the media I don't think there's any real doubt anymore that electric vehicles are going to take over during the next couple of decades.

Desmond Wheatley: So should our battery business and the legacy business, which we continue to pursue through our Beam Europe acquisition. Government sales will remain the strongest contributor in 2023, with sales to the federal government in the United States comprising the largest segment. That's hardly surprising considering the fact that the U.S. federal government has the largest fleet of vehicles in the world and is today the largest consumer of diesel and gasoline but will tomorrow be the largest consumer of electric vehicle charging infrastructure.

Speaker Change: I also believe that electric vehicle charging infrastructure will spend the next many years, playing catch up with electric vehicle sales simply because its easier to put consumers into electric vehicles than it is to put electric vehicle chargers into the environment.

That means that as we see the inevitable uneasiness in consumer adoption rates for electric vehicles, we ought to see a more consistent and continued level of demand for the charging infrastructure, which will be required to power the mall.

Speaker Change: We are still seeing strong demand for electric vehicle charging infrastructure. Our pipeline currently stands at about 150 million, it's up again.

Desmond Wheatley: Our GSA contract and the Blanket Purchase Authority that rides with it creates an excellent opportunity for us to sell into what is by far the world's largest customer. We saw more evidence of the validity of this opportunity when we received a follow-on order from the U.S. Army for $7.5 million worth of EV arcs and another order from the Department of Homeland Security for about $5 million. These are normally good indications of the continuing opportunity with the federal government but also the potential for material follow-on orders from existing customers. State level and municipal sales also remained strong last year.

Speaker Change: All of that pipeline is currently derived from the U S market, but not yet including European pipeline numbers, because we're just getting our feet under us in terms of selling into that market. Although we've already had a very notable and material successes.

In March we announced that we'd been awarded our first European government supplier agreement on the Uk's Crown in commercial services, which is the main purchasing vehicles for the U K government entities. This is it.

Actually the same as the GSA contract, which we have with the federal government in the United States and not dissimilar to the contracts that we have with states like California.

Speaker Change: These contracts allow government entities to buy our products without having to go through any further commercial due diligence or competitive purchasing programs.

Desmond Wheatley: And I'm also really encouraged by the fact that we continued growth in our commercial sales. In fact, about a fifth of all the sales we made last year were commercial entities, not government. It's worth remembering that prior to COVID, more than half of our sales were commercial, and we're actually selling more to commercial customers today than we were then. But of course, our sales across the board have grown so much that even though we're selling more now to commercial customers than we were prior to COVID, at today's sales levels, that only equals about 5% of total sales.

All of that analysis and competition has undertaken before they go under contracts to us once the contracts are in place, we're able to sell our products to them in a streamlined manner.

So easy to win these contracts, but it's very clearly.

Speaker Change: A good strategy for us as demonstrated by the tremendous growth that we've had in both federal and state sales over the last couple of years.

No we have our first such agreement in place in Europe, and I feel confident that it won't be our loss.

Speaker Change: I feel equally confident that as these types of contract vehicles will deliver the same sort of growth and performance for us in Europe as they have done in the United States. In fact, the conditions in Europe could be considered it would be a good deal more fertile for our products than they are here.

Desmond Wheatley: I expect that we'll continue to see significant activity from government entities in the quarters and years that come, but I do also anticipate that we'll see an increase in our commercial sales. And, in fact, in the future, I believe that commercial sales will dominate.

Speaker Change: Shortly after we announced that we'd been awarded this contract we announced the first purchase order from the United States from the rather from the United Kingdom's Ministry of Defense, which was written against this contract. The purchase order was a permit was for $1 billion worth of BV ox and an art mobility trailer, which will be produced in our Serbian facilities and shipped to them.

Desmond Wheatley: As we start to add data from Beam Europe to these considerations, I expect these numbers to grow in an absolute sense, but I also expect that we'll continue to have a strong government-led sales machine because, after all, our products are transportation and energy infrastructure products which have long been the domain of government spending. Let's spend a couple of minutes on Beam Europe. In October of last year, we closed on the acquisition of what was then Amiga, a Serbian-based manufacturer of steel structures with electrical components integrated into them.

Speaker Change: British Army for their overseas basis on the island of Cypress.

Speaker Change: This is an absolutely fantastic win for us and I believe a harbinger of a great deal more to come.

Speaker Change: It took us five years to get our first million dollar contracts in the United States, It's taken up less than five months to get there in Europe.

Speaker Change: I was already very enthusiastic about our acquisition in Europe before we received the sports shorter I have no less enthusiastic now that we're already producing and selling our products into the massive market.

Speaker Change: The <unk> team has been selling well in the United States as well.

Desmond Wheatley: Amiga, now Beam Europe, was and remains, for example, the fourth-largest streetlight manufacturer in Europe. It sold products into 17 nations, including the United States. If you walk down the street in Miami, it's likely that you walked under streetlights manufactured by Amiga. I've been looking for an international expansion opportunity for several years. I've considered many and even negotiated with several of them.

Though we've not released recently received another very large order like the $30 million purchase order, we got from the U S. Army couple of years ago, I do believe that it's likely to happen again and again and again.

Speaker Change: In the meantime, the sales team has been bringing lots of excellent though smaller orders. This is clearly evidenced by the fact that we have over 105th and $50 million in pipeline today, I think we had over $20 million in contracted backlog of anti <unk> and a 2023, having revenue just under 70 million during that year.

Speaker Change: The two together and you get about $90 million of contracts and a gain from the U S. Only European sales are ahead of us.

Desmond Wheatley: But prior to Amiga, I'd not found anything that met the extremely high standards that we have where an acquisition is concerned. In hindsight, I'm delighted that none of the other opportunities worked out because I doubt I could have found a better fit than Amiga to become Beam Europe. They were exactly what I was looking for.

Speaker Change: We do still expect Lumpiness in our order cadence as the EV charging industry continues to evolve from time to time I believe we'll receive very large orders, which will drive up our backlog as we become more efficient and are able to deliver more units faster, we should expect to see that backlog come down offset by the steady flow of purchase orders for the sales team are bringing in.

Desmond Wheatley: They have the skill sets, the experience, the machines, equipment, and facilities required to mass produce our products. All they lacked was our IP and know-how, but they had a great deal of credibility and existing relationships. And, in many cases, contracts with customers who have more or less exactly the same profile as those customers with whom we've had a great deal of success in the United States. For more than 30 years, Amiga has been selling steel structures with integrated electronic components. That's basically what our products are. For on-street applications, to cities, states, nations, militaries, and large corporate entities.

Short term Lumpiness does not in any way make me anticipate anything but long term growth.

Speaker Change: And the most effective way for us to offset this lumpiness in sales cadence is to continue to diversify our customer base and product offerings and that is exactly what we're doing.

Speaker Change: Our acquisition in Europe has opened up the largest market in the world for our products and we've already demonstrated our ability to sell into that market.

Speaker Change: Bringing new products like <unk> standard the market will create opportunities for large and small orders, which would further stabilize and reduce the lumpiness in order cadence.

Speaker Change: So should our battery business in the legacy business, which we continue to pursue through our beam Europe acquisition.

Speaker Change: Government sales remained the strongest contributor in 2023 with sales to the federal government United in the United States, comprising the largest segment.

Speaker Change: That's hardly surprising considering the fact that the U S. Federal government is the largest fleet of vehicles in the world and is today, the largest consumer of diesel and gasoline, but well tomorrow will be the largest consumer of electric vehicle charging infrastructure.

Desmond Wheatley: These are exactly the sort of customers to whom we've been selling our renewably energized EV charging and energy security products. So the task was simply to rebrand Amiga as Beam Europe and send them our drawings, designs, engineering, and know-how. We will deliver our sales collateral and train their sales team to go back to their existing customers and tell them that after 30 years of good experience with Amiga's products, they can now rely on Beam Europe to deliver those products and a whole new suite of renewably energized EV charging solutions and energy security storage solutions, at a time when these sort of products could not be more in demand.

Speaker Change: Our GSA contract and the blanket purchase authority that rides with it creates an excellent opportunity for us to sell into what is by far the world's largest customer.

Speaker Change: We saw more evidence of the validity of this opportunity when we received a follow on order from the U S Army for seven and a half million dollars worth of E V Archs and another order from the department of Homeland Security for about 5 million worth.

Speaker Change: These are not only good indications of a continuing opportunity with the federal government, but also the potential for material follow on orders from existing customers.

Speaker Change: State level and municipal sales also remained strong last year and also really encouraged by the fact that we continued growth in our commercial sales and you talked about a fifth of all the sales we made last year with commercial entities not government.

Speaker Change: It's worth remembering that part to cope with more than half of our sales were commercial I wonder actually selling more to commercial today than we were then but of course ourselves across the board have grown so much that even though we're selling more now to commercial than we were prior to COVID-19 today's sales levels not only equals about 5% of total sales.

Desmond Wheatley: With the acquisition of Amiga, Beam Europe came into existence on six acres of land, which we own with 250,000 square feet under roof, equipped with all the machines and facilities required to manufacture Beam Global's products. In fact, we're far better equipped in Europe now than we are in the United States. This will have significant impacts on the economics of producing our products over there because there are several processes and expensive processes at that which we outsource in the United States but which we are self-performing in our European facilities.

Speaker Change: I expect that we'll continue to see significant activity from government entities in the quarters and years to come but I do also anticipate that we'll see an increase in our commercial sales and in fact in the future I believe that commercial sales will dominate.

Speaker Change: As we start out data from being Europe to these considerations I expect these numbers to grow in an absolute sense, but I also expect that we'll continue to have a strong government leaning sales machine because after all our products are transportation and energy infrastructure products, which have long been the domain of government spending.

Speaker Change: Let's spend a couple of minutes on be in Europe.

Speaker Change: In October of last year, we closed upon the acquisition of what was then a meager sorbian based manufacturer of steel structures with electrical components integrated into them.

Desmond Wheatley: Let me give you a single and very meaningful example of this. Our engineered ballast and traction pad, which forms the base of our EVR product, is formed using a large curved plate of steel with structural enhancement. In the United States, we do not have a machine that is capable of rolling the curve into that plate.

Speaker Change: [noise] Amiga, notably in Europe was and remains for example, the fourth largest streetlight manufacturer in Europe and sold products into 17 nations, including the United States.

Speaker Change: If you walk down the street and Miami, It's likely that you walk under Streetlights manufactured by Omega.

Desmond Wheatley: And as a result, we have to outsource that process to a third party. This is not cheap as we pay third-party margins and the disruption and expense of shipping the parts to that facility and then back to our factory where we can complete the base. Beam Europe, on the other hand, has a machine on its premises that is capable of performing that role without the plate ever leaving our factory there. Beam Europe also has sandblasting and painting facilities, which means that another of our most expensive processes is performed in-house while it's outsourced to the United States. We don't pay third-party margins, and we don't have the cost, complexity, and risk of transporting the plate to perform that process or the process of rolling the plate.

Speaker Change: I've been looking for an international expansion opportunity for several years I've considered considered many and even negotiated with several of them, but parts of Amiga I've not found anything that meets the extremely high standards that we have when an acquisition is concerned.

Speaker Change: The ninth site I'm delighted that none of the other opportunities worked out because I don't I couldn't find a better fit than omega to become beam Europe.

They were exactly what I was looking for they.

Speaker Change: We have the skill sets they experience the machines equipment and facilities required to mass produce our products only liked was our IP and knowhow.

Speaker Change: They are a great deal of credibility and existing relationships and in many cases contracts with customers, who have more or less exactly the same profile as those customers with whom we've had great deal of success in the United States.

Speaker Change: For more than 30 years, Amiga has been selling steel structures with integrated electronic components, basically where our products are for only three applications.

Speaker Change: To cities States nations militaries in large corporate entities.

Desmond Wheatley: As a result, our ballast and traction pad costs 45% less to manufacture at Beam than it does in our U.S. facility. The Balance & Traction Pad is one of the single largest cost contributors to the EV arc. So you can see that saving 45% on each of these plates will have a significantly beneficial impact on our gross profitability. There are other examples, but this gives you a good indication of another reason I'm so enthusiastic about our prospects in Europe.

Speaker Change: These are exactly the sort of customers to whom we've been selling our renewable energized E V chartering and energy security products.

Speaker Change: So the task was simply to rebrand Amiga that's being Europe.

Speaker Change: Send them, our drawings designs engineering Knowhow deliver.

Speaker Change: To deliver our sales collateral and trail train their sales team to go back to their existing customers and tell them. The after 30 years of good experience with Omega products. They can now rely on beam Europe to deliver them those products and a whole new suite of renewable energized EV charging solutions and energy security and storage solutions.

Desmond Wheatley: Further economic benefits are derived from the fact that just about everything is less expensive in Serbia than it is in California or Illinois, where we produce our projects in the U.S. And because we own the land and buildings and all the equipment and machinery, we do not have lease liabilities or other payments to enable the production of our products. Our timing when entering the Serbian market could hardly have been better. While still at its early stages, there is a great deal of investment from both the United States and Western Europe and Serbia.

Speaker Change: The time when these sorts of products could not be more in demand.

Speaker Change: With the acquisition of beam.

Speaker Change: Amiga been Europe came into existence on six acres of land, which we own with 250000 square feet under roof equipped with all the machines and facilities required to manufacture being more global products.

Speaker Change: If I were far better equipped in Europe.

Two states.

Speaker Change: This will have significant impacts on the economics of producing our products over there because there are several processes inexpensive processes, which we outsource in the United States, but which we are self performing and our European facilities.

Desmond Wheatley: The people are very well educated and have a great weekend. The country is well positioned centrally in Europe with good access to the Levant and all of Western Europe as well. Serbia can trade tariff-free with the European Union, but because it's not yet in the European Union, it's not subject to the rigorous and expensive regulatory and compliance environment which exists.

Speaker Change: Let me give you a single and very meaningful example of this.

Speaker Change: Our engineered ballast and traction pod, which forms the base of our EV product is formed using a large curved plaintiff steel structural enhancements indeed.

In the United States, we do not have a machine, which is capable of rolling the curve into that play and as a result, we have to outsource that process to a third party.

Speaker Change: It is not cheap as we pay third party margins and the disruption in expense of shipping the parks to that facility and then back to our factory, where we can complete the base back.

Desmond Wheatley: At the moment, it looks like Serbia will in fact join the EU, but not until 2030, which means that we'll have essentially about a six-year honeymoon in which to grow our European enterprise in a very business-friendly environment. Europe represents a huge opportunity for us because it's the largest automotive market in the world, with over 400 million cars. Just put that in perspective. The United States has 290 million, and China has 390 million.

Speaker Change: Being in Europe on the other hand has the machine on premises is which.

Speaker Change: Which is capable of performing that role without the plate ever leaving our factory there.

Speaker Change: <unk> also has sand blasting and painting facilities, which means that another of our most expensive processes is performed in house, while it's outsourced the United States, We don't pay a third party margins and we don't have the cost complexity and risk of transporting the play to perform that process or the process of rolling that play.

Speaker Change: As a result, our Bauer subtraction podcast, 45% less to manufacturer beam than they do in our U S facilities.

Desmond Wheatley: So 400 million is obviously a hell of a lot more than that. Beyond that, Europe has announced an outright ban on the sale of anything but zero emission vehicles in 2035, just 11 years from now, and it has committed to having zero carbon electricity by 2050. It's perhaps also true that Europe has a generally more positive view towards renewable energy and the environment than we have in the U.S., which I believe will only make our products more popular over there.

Speaker Change: The balance contraction part is one of the single largest cost contributors to the E. Arc. So you can see the saving 45% on each of these plays will have a significantly beneficial impact on our gross profitability.

Speaker Change: There are other examples but this gives you a good indication of another reason I'm, so enthusiastic about our prospects in Europe.

Speaker Change: Further economic benefits are derived from the fact that just about everything is less expensive and Serbia than it is in California, or Illinois, where we produce our projects in the U S.

Speaker Change: We own the land and buildings and all the equipment and machinery, we do not have lease liabilities or other payments to make to.

Desmond Wheatley: Our ability to deploy EVRPOS without doing any construction or crunching will be even more compelling in ancient cities where digging down six inches is like a journey back in time. The war in Ukraine has made Europe very aware of the vulnerabilities incumbent in its centralised grid infrastructure and its reliance on foreign sources of carbon fuels to generate electricity. Our products are, of course, immune to centralized grid failure and generate and store all of their own electricity, so our timing is very good where that's concerned as well. At some point, and I hope I don't sound too optimistic here, the good guys will win in Ukraine, and there will be a massive rebuilding effort. I do not imagine that there will be a great deal of investment in gas stations and 20th century technology when that rebuilding takes place.

Speaker Change: To enable the production of our products.

Speaker Change: Our timing on entering the Serbian market could hardly have been better.

Speaker Change: While still at its early stages has a great deal of investment from both the United States and Western Europe in Serbia the.

Speaker Change: People are very well educated have a great work ethic.

Speaker Change: The countries well position centrally in Europe with good access to the Levant in all of Western Europe as well.

Speaker Change: Serbia can trade tariff free with the European Union, because it's not yet because it's not yet in the European Union, it's not subject to the rigorous and expensive regulatory and compliance environment, which exists there.

Speaker Change: At the moment it looks like Serbia will in fact joined the EU, but not until 2030, which means that we will have essentially about a six year honeymoon in which to grow our European enterprise in a very business friendly environment.

Speaker Change: Europe represents a huge opportunity for us because it's the largest automotive market in the world with over 400 million cars, just put that in perspective, the United States is $290 million, China 319 minutes. So 400 million is obviously, a hell of a lot more than that.

Desmond Wheatley: Kiev in Ukraine is closer to our Serbian facilities than Denver is to San Diego. You can be certain that when the rebuilding efforts start, Beam Europe will present our rapidly deployed EV charging, energy storage, and electrical infrastructure products manufactured in the region. One never wants to exploit these types of situations, but it undeniably seems like an excellent opportunity for us. Of all the fantastic assets and opportunities that Beam Global gained as a result of this acquisition, the human resource has to be the greatest. 210 excellent employees, most of whom have been with the company for many years and are, as a result, highly experienced in the areas which are so important to our success.

Speaker Change: One that Europe has announced an outright ban on the sale of anything but zero emission vehicles. In 2035, just 11 years from now and committed to having zero carbon electricity by 2050.

Speaker Change: It's also true that Europe's a generally more positive view towards renewable energy and the environment that we have in the U S, which I believe will only make our products more popular wherever they are.

Our ability to deploy E V O cost without doing any construction or trenching will be even more compelling in ancient cities were taking down six inches as like a journey back in time.

Speaker Change: The war in Ukraine has made you are very aware of the vulnerabilities incumbent and it's centralized grid infrastructure and its reliance on foreign sources of carbon fuels to generate electricity.

Speaker Change: Our products are of course immune to centralized grid failure and generate and store all of their own electricity. So our timing is very good where that's concerned as well.

Speaker Change: At some point and I hope I don't sound too optimistic here. The good guys will win in Ukraine, and there'll be a massive rebuilding effort.

Desmond Wheatley: Of those 210 employees, over 30 are advanced degree engineers, most of whom speak excellent English and all of whom create fantastic work products. Since the acquisition, and, if I'm honest, even before we closed, those engineers have been working with our U.S.-based engineers on the fulfillment of the EV standard product development. Our US-based engineers are experts in renewable energy, battery storage, and EV charging, but we know very little about what it takes to make street lights.

Speaker Change: I do not imagine that there'll be a great deal of investment in gas stations in 20th century technology went not rebuilding takes place.

Speaker Change: <unk> in Ukraine is closer to our Serbian facilities than Denver as to San Diego.

Speaker Change: You can be certain that when rebuilding efforts start being Europe will present, our rapidly deployed E recharging energy storage and electrical infrastructure products manufactured in the region.

Speaker Change: Whenever it wants to exploit these types of situations, but undeniably seems like an excellent opportunity for us.

Speaker Change: Of all the fantastic assets and opportunities that being global gained as a result of this acquisition the human resource has to be the greatest.

Speaker Change: 210 excellent employees, most of whom have been with the company for many years and then it all as a result higher inexperience in the areas, which are so important to our success.

Desmond Wheatley: They're complemented by our European engineers, who are arguably some of the world's premier experts on streetlight engineering and manufacturing. We have made tremendous progress in the development of the EV standard product. And while I was in Serbia just three weeks ago, I saw and touched...

All of those 210 employs over 30 or advanced degree engineers, most of whom speaking excellent English and all of whom create fantastic work product.

Speaker Change: Since the acquisition and if I'm honest, even before we closed those engineers have been working with our U S. Based engineers on the fulfillment of the E V standard product development.

Speaker Change: Our U S based engineers or exports on renewable energy battery storage and EV charging, but we know very little about what it takes to make streetlights.

Desmond Wheatley: The structural elements of the first EV standard prototypes, which we will bring to market in the next few months. It was a truly exciting moment for me to see this product, which we've had patented since 2019 in the US and recently received a patent for in Europe, actually being made. We could not have done this without the acquisition and the fantastic team in Serbia who are now part of the Beam Global family.

Speaker Change: There are complemented by our European Engineers, who are arguably some of the world's premier experts on streetlight engineering and manufacturing.

Speaker Change: We have made tremendous progress in the development of the EV standard product.

Speaker Change: And while it was in survey just three weeks ago I saw untouched.

Speaker Change: So the structural elements of the first E. B stand reported prototypes, which we will bring to market in the next few months. It was a truly exciting moment for me to see this product, which we've had pondered since 2019 in the U S. And recently received a patent for in Europe actually being made.

Desmond Wheatley: I'm also absolutely delighted to have the support and leadership of Ivan Tlachinik, Beam Global General Manager, and Aleksandr Toskovich, who is one of the most operationally engaged sales and marketing leaders I've ever met. Under Ivan's leadership, Amiga grew to the point where it could make profitable sales in 17 nations in Europe, Africa, and North America.

Speaker Change: We could not have done this without the acquisition and the fantastic team in Serbia, who has no part of it being global family.

Speaker Change: I'm also absolutely delighted to have the support and leadership of <unk> being global General manager and Alexander <unk>, who is one of the most operationally engaged sales and marketing leaders I've ever met.

Speaker Change: Under <unk> leadership Amiga grew to the point, where it can make profitable sales and 17 Nations in Europe Africa, and North America.

Desmond Wheatley: He now runs our European operations and has done an outstanding job of integrating what was Amiga and is now Beam Europe into the Beam Global organization. I'm delighted to have him, Alex, and every other member of the Beam Europe team on board. By the way, a couple of excellent resources which you can take a look at are on our website. Firstly, a video of the live tour that Ivan and I did of the Beam Europe facilities. It's long, an hour and a quarter in fact, but that's because there was so much to show and so much to describe.

Speaker Change: Runs our European operations and has done an outstanding job of integrating what wasn't Vega I, just noted being Europe instead of being a global organization.

Speaker Change: I'm delighted to have him and Alex and every other member of the beam Europe team on board.

Speaker Change: Well there were a couple of excellent resources would you can take a look at our website <unk>.

Speaker Change: Lee a video of the live tour event and I did have the beam Europe facilities as long quarter in fact, but that's because it was so much to so and so much to describe even.

Desmond Wheatley: Even if you only skim through the video, I believe that you will gain an excellent appreciation of the quality of the asset we acquired and the tremendous new opportunity for Beam Global's growth that comes with it. You'll also find on our website a video and blog post describing the recent utility-scale battery seminar which Beam Europe delivered in Belgrade two or three weeks ago. This seminar was attended by utility and government leaders from across the Balkans, four or five nations which, like most other European countries, and to an increasing extent, U.S. states, are increasingly requiring the deployment of utility-scale energy storage with all-new large solar or wind deployments.

Even if you only skim through the video I believe that you will gain an excellent appreciation of the quality of the asset we acquired and the tremendous new opportunity for being global growth, which come with it.

Speaker Change: You'll also find on our website a video and blog posts describing the recent utility scale battery seminar, which been Europe delivered in Belgrade, two or three weeks ago.

Speaker Change: This seminar was attended by utility and government leaders from across the Balkans, a four or five nations, which was like more or like most other European countries and to an increasing extent U S. States are increasingly requiring the deployment of utility scale engine energy storage with all new large solar or wind deployments.

Desmond Wheatley: Beam Europe was approached by leaders in the energy space after they learned about Beam Global's acquisition of Amiga and asked if we could provide energy storage solutions and know-how for their expanding renewable energy deployment. Saeed Al-Halaj, Beam Global's Chief Battery Scientist and the founder of All Cell Technologies, which is a battery company we bought a couple of years ago, presented to an audience of 40 or so leaders on battery technologies and utility scale deployment.

Speaker Change: The New York was approached by leaders in the energy space. After they learned about being Global's acquisition of Omega and asked if we can provide energy storage solutions and knowhow for their expanding renewable energy deployment.

So I eat our lunch being global's chief battery scientists and the founder of all cell technologies, which is a battery company. We bought a couple of years ago presented to an audience of 40 or so leaders on battery technologies and utility scale deployments.

Desmond Wheatley: I followed him and described various different financing scenarios which Beam Global can offer, all the way from outright capital purchases to battery energy storage as a service. Serendipitously, I just spent a week in Washington, D.C., meeting with various congressmen and with the White House on energy security and EV charging infrastructure-related matters. While I was there, I met with the International Development Finance Corporation, which is a branch of the federal government tasked with providing U.S. companies with inexpensive and long-term financing to promote the deployment of U.S. technologies in the developing world and also sustainable energy infrastructure in environments like the Balkans.

Speaker Change: I, followed them and describe various different financing scenarios, which are being global can offer all the way from outright capital purchases to battery energy storage as a service.

Speaker Change: Southern <unk> I've, just spent a week in Washington D. C meeting with various congressman and with the White House on energy security and EV charging infrastructure related matters.

I was there on that with the International Development Finance Corporation, which is a branch of the federal government tasked with providing U S companies with inexpensive and long term financing to promote the deployment of U S technologies in the developing world and also sustainable energy infrastructure in environments like the Balkans.

Desmond Wheatley: This very significant source of large amounts of capital can, with our existing credit facility, enable Beam Global to offer competitive rates and terms on energy storage products valued in the tens and even hundreds of millions of dollars. We've had extremely positive follow-up since the symposium, and this is an opportunity that at once validates Beam Global's broader strategy and our acquisition of both All-Cell and Amiga. It was the perfect amalgamation of our company's growing presence and technical prowess in areas that could not be more timely or compelling.

Speaker Change: This very significant source of large amounts of capital can with our existing credit facility enable being global to offer competitive rates and terms on energy storage products valued in the tens and even hundreds of millions of dollars.

Speaker Change: We've had extremely positive follow up since the symposium and this is an opportunity which at once validates being global's broader strategy and our acquisition of both also on Amiga. It was the perfect amalgamation of our company's growing presence and technical progress in areas, which could not be more timely are compelling.

Desmond Wheatley: By the way, that seminar was also attended by the U.S. Embassy over there. We've had tremendous support from the ambassador and his team in that market. Please check out both videos and blog posts when you get a moment. You can find them on our website at beamforall.com.

Speaker Change: By the way that seminar was also attended by the U S. Embassy over there and we've had tremendous support from the ambassador and his team in that market.

Speaker Change: Please check out both videos and blog posts when you get a moment you can find them on our website at beam for all Dot com.

Desmond Wheatley: Our acquisition and formation of Beam Europe has, in my opinion, far more than doubled our opportunity for our existing product. It's a larger market with macro tailwinds, which all seem to point towards products and solutions like ours. But acquiring Amiga and creating Beam Europe has done more than simply increase our access to markets for existing products. We've added new revenue opportunities by increasing our product portfolio and inherited solid customer relationships, which are exactly the sort of entities that we'd target had we never made the acquisition.

Speaker Change: Our acquisition and formation of being Europe has in my opinion far more than double the opportunity for our existing products.

Speaker Change: It's a larger market with multi with macro tailwind, which all seem to point towards products and solutions like ours, but acquiring a meager in creating beam Europe has done more than simply increase our access to markets for existing products. We've added new revenue opportunities through increasing our product portfolio and inherited soldier solid customer relationships, which are exactly this.

Speaker Change: Sort of entities, which we target we never made the acquisition.

Desmond Wheatley: We've also integrated a highly skilled and experienced team that would otherwise have taken us many years and an unknown amount of money and time to create. And, of course, we cannot lose sight of the fact that this acquisition has accelerated our development of the EV standard product, a product which I still believe may end up being our biggest revenue producer before long. This acquisition and the more than doubling of our business was a major strategic undertaking.

Speaker Change: We've also integrated the highly skilled and experienced team that would otherwise have taken us many years and an unknown amount of money and time to create.

Speaker Change: And of course, we cannot lose sight of the fact that this acquisition has accelerated our development of VB standard product I brought out which I still believe may end up being our biggest revenue producer before long.

Speaker Change: This acquisition and the more than doubling of our business was a major strategic undertaking we now have more employees machines and equipment in Europe than we do in the United States and while we leased about 80000 square feet of factory facilities in San Diego and Chicago, We own 250000 square feet under roof on six acres of land in Europe, we have no.

Desmond Wheatley: We now have more employees, machines, and equipment in Europe than we do in the United States. And while we lease about 80,000 square feet of factory facilities in San Diego and Chicago, we own 250,000 square feet under roof on six acres of land in Europe. We have no monthly payments and no lease liabilities to negatively impact our profitability.

Monthly payments and no lease liabilities to negatively impact our profitability.

Desmond Wheatley: You could be forgiving for thinking that that must have been a very expensive and highly deceptive activity on our part. In fact, we bought the company for less than the value of the real estate and the hard assets. And when all is said and done, we still have no debt, cash in the bank, and an almost unbelievably low 14 million shares outstanding. Please compare that to any of our so-called peers or competitors.

Speaker Change: Could be forgiving that muscle for thinking that that must have been a very expensive and highly dilutive activity on our part.

Speaker Change: We bought the company for less than the value of the real estate and the hard assets I'm always when all is said and done we still have no debt cash into bank and I'm almost unbelievably low 14 million shares outstanding. Please.

Speaker Change: Please compare that to any of our so called peers or competitors.

Desmond Wheatley: Before I sum up, just let me say a quick couple of words about our warrants. When we IPO'd in 2019 through a traditional process, not a SPAC, we issued a unit that comprised a share of common stock and a warrant with a strike price of $6.30.

Speaker Change: Before I sum up just let me say a quick couple of words about our warrants.

Speaker Change: When we IPO Ed in 2019 through a traditional process not Westpac, we issued a unit, which comprised a share of common stock and a warrant with a strike price of $6.03.

Desmond Wheatley: The warrant has traded since that time under the ticker BEMW. Most of the warrants which we issued have been exercised during the last five years, but at December 31st of 2023, there were still around 400,000 unexercised warrants which have continued to trade since that time. And if you're left, expire at 5 p.m. Eastern on Thursday, the 18th of April, tomorrow.

Speaker Change: The warrant is traded since that time under the ticker beam W. B M W.

Speaker Change: Most of the warrants which were issued have been exercised during the last five years, but at December 31, 2023, there was still around 400000, an exercise warrants, which have continued to trade since that time.

Speaker Change: And neither for left explorer at five P M. Eastern on Thursday, the 18th of April Tomorrow.

Desmond Wheatley: They're in the money today. Following the expiration of the warrant, the ticker BEM will cease to exist and Beam Global will trade solely under the ticker BEM. So, to sum up, a tripling of revenues, positive and significantly improved gross profits, significantly reduced operating costs to a percentage of revenues, a tangible path to cash flow, a growing pipeline and healthy backlog, a major geographic expansion into one of the world's, well, no, the world's largest market for our products, significant enhancements of our operational, engineering, and leadership teams, multiple new and meaningful patents, and the first physical components of a major new product launch, all achieved in the same year and without meaningful dilution.

Speaker Change: They're in the money today.

Speaker Change: Following the exploration of the ones that take a BMW will cease to exist from being global trade solely under the ticker <unk> B E.

Speaker Change: So to sum up a tripling of revenues positive and significantly improved gross profits significantly reduce operating cost as a percentage of revenues are tangible posh path to cash flow, our growing pipeline and healthy backlog a major geographic expansion into the one of the worlds well no the worlds largest market for our products.

Speaker Change: Significant enhancements of our operational engineering leadership teams multiple new and meaningful patents and the first physical components of a major new product launch all achieved in the same year and without meaningful dilution.

Desmond Wheatley: That was Beam Global's 2023, the best year by far in our history. It's still a great time to be Beam Global, and I believe even better times are ahead of us. Thank you for your attention, your continued support of Beam Global, and I'll now return the call to the operator and use our remaining time to answer any questions which you may have, and I'll go over a little of you if you want. So operator, we'll go to questions now, please. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone.

Speaker Change: That was being Global's 2023, the best year by far in our history, it's still a great time to be being global and I believe even Bachelor at times are ahead of us.

Speaker Change: Thank you for your attention and your continued support of being global and I'll now return the call to the operator and use our remaining time to answer any questions. You may have and I'll go over a little if you. If you want so operator well go to questions now please.

We will now begin the question and answer session.

Operator: To ask a question you May Press Star then one on your Touchtone phone.

Operator: If you are using a speakerphone, please pick up your handset before pressing the keys to withdraw your question. Please press the star, then 2. At this time, we will pause momentarily to assemble our roster. And, if I could just say this, could you try and limit yourself to one question or maybe one quick follow-up question, because I want to make sure that everybody gets a chance. Thank you. The first question comes from Christopher Souther, from B. Riley. Please go ahead. Hi Chris. Hey, thanks for taking my question here. Maybe just, I appreciate all the color you provided here.

Operator: If you are using a speakerphone please pick up your handset before pressing the keys.

Operator: To withdraw your question. Please press Star then two.

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

Speaker Change: And if I can just say this could you try and limit yourselves to one question or maybe one quick follow up because I want to make sure that everybody gets a chance. Thank you.

Speaker Change: The first question comes from Christopher Suva from B Riley. Please go ahead.

Christopher Suva: Hi, Chris.

Christopher Suva: Thanks for taking my question here, maybe just a and I. Appreciate all the color you provided here, maybe just touching a bit more on the margin improvement expectations.

Christopher Curran Souther: Maybe just touching a bit more on the margin improvement expectations. It sounded like you said we had about 4000 of the 12,000 that we've already been able to recognize here last year. Can you walk through the timing of the remaining there, or correct me if I was wrong there?

Christopher Suva: It sounded like you said, we had about 4000 of the 12000 that we've already.

Been able to recognize here last year can you walk through the timing of the remaining there are correct me if I'm wrong there.

Desmond Wheatley: No, yeah, look, I think basically, what's happened is that we have started to introduce those savings, which I described in the third quarter call. Working through inventories and all the other things that we've had to work on, we have not got all the way through that process yet, but I'm confident that we'll continue to improve into 2024. And then, where are we as far as identifying some of the further reductions from the insourcing of components from Serbia? Are all those kind of incremental?

Speaker Change: No look I think basically what what.

Speaker Change: What's happened is we have started to.

Speaker Change: <unk> introduced those savings, which I described in the third quarter call.

Speaker Change: Working through inventories and all the other things that we've had to work on we have not go all the way he got process, yet, but I'm confident that we will continue to improve into the into 'twenty 'twenty four.

And then where are we as far as identifying further reductions for.

Speaker Change: In sourcing components from Servier or others kind of Incrementals have you identified any specific things you'd kind of call out there.

Desmond Wheatley: And have you identified any specific things you'd kind of call out there, you know? that you could parse out as far as, you know, what further reductions might look like. Yes, so far, all the indications are that we're going to have far better economics in Serbia than we do in the US.

Speaker Change: That you could parse out as far as what further reductions might look like.

Speaker Change: Yes, so far all the indications are that we're gonna have far better economics in Serbia than we do in the U S and of course, we will be reporting consolidated numbers. So margin improvements in Serbia will improve our overall being global margins.

Desmond Wheatley: And of course, we'll be reporting consolidated numbers. So margin improvements in Serbia will improve our overall beam global margin. And also, Chris, you know, this is a never-ending story. It's painted the Golden Gate Bridge, as far as I'm concerned.

Speaker Change: And also Chris you Didnt all of a sudden never ending story is painting the Golden Gate bridge as far as I'm concerned as soon as we can with finished we start all over again.

Desmond Wheatley: As soon as we think we're finished, we start all over again. And I do still believe that there are a lot of other margin improvements that can be made in the product and that we will do that, and we're going to get better at it, frankly. Got it. That's great to hear. I'll hop in the queue.

I do still believe that there are a lot of other margin improvements that can be made in the product and that we will do that.

Speaker Change: And we're gonna get bachelorette, yet frankly.

Chris: Okay, that's great to hear I'll hop in the queue.

Christopher Curran Souther: Thank you. Thanks, Craig. Our next question comes from Samir Joshi from WHIF H3 Rainwhite. Please go ahead. Hey Sameer. Hey Desmond. How are you?

Speaker Change: Thank you.

Thanks, Chris.

Speaker Change: Our next question comes from Sameer Joshi from with H C. Wainwright. Please go ahead.

Sameer Joshi: Hey, Timna.

Samir Joshi: Thanks for taking my questions. Just a quick one. The backlog of 22 million, I think you mentioned it doesn't include anything from Beam Europe. Do you have any visibility in Europe right now in terms of pipeline and backlog? Yeah, as I said, we're still getting our feet under us where that's concerned. European business equipment, before we acquired it, was much less concerned with backlog. And if not, it's not even a term that they used.

Sameer Joshi: How are you thanks for taking my questions.

Sameer Joshi: But just a quick one.

Sameer Joshi: The backlog of 22 million I think you mentioned it doesn't include anything from being Europe.

Sameer Joshi: Do you have like a.

Sameer Joshi: What kind of visibility do you have in Europe, right now in terms of pipeline and backlog.

Speaker Change: Yeah as I said, we're still getting our feet under us where that's concerned.

Speaker Change: Our European business.

Speaker Change: Before we acquired it was was much less concerned with backlog and if not even a return that they used however, they've had a steady and growing business.

Desmond Wheatley: However, they've had a steady and growing business, which we're enhancing, as I mentioned in my comments about using our balance sheet to help them smooth out their cash position. Previously, this is a company, by the way, that had no debt; it was a creative acquisition, had brought no debt with it, and didn't even have any credit accounts or anything; they did everything out of cash that they generated from sales. So we've been able to help with that to make them more efficient.

Speaker Change: Which we are enhancing as I mentioned in my comments to using our balance sheet to help them smooth out.

Speaker Change: They're they're they're they're cash position previously this was accompanied by the way it had no debt. It was accretive acquisition brought new debt with it I didn't even have any credit I kind of draw anything they did everything out of cash that they that they generated from sales. So we've been able to help with that make them more efficient and I think we're already bearing fruit from that at the moment, we have no. None of that backlog is included in the.

Number that I quoted however, obviously, we are now starting to look more carefully at the contracts that we have in Europe, and then we certainly added to the backlog with it with the.

Desmond Wheatley: And I think we're already bearing fruit from that. At the moment, we have none, but none of that backlog is included in the number that I quoted. However, obviously, we are now starting to look more carefully at the contracts that we have in Europe, and then we certainly added to the backlog with the purchase order from the UK MOD. I'm happy that we're able to report that we have these backlog numbers without Europe right now because I believe that Europe will be a significant contributor in the future.

Speaker Change: A purchase order from the from U K M O D.

Speaker Change: I'm I'm I'm I'm I'm happy that we're able to report that we've got these backlog numbers without Europe right now because I believe that Europe will be a significant contributor in the future, but I need to get everybody much more confident with those numbers before we start talking about them publicly.

Speaker Change: Understood and just one clarification on the same backlog number.

$7 4 million from U S Army and $4 8 million from the D. D. Edge is those numbers are not included in this range of Dominion is that correct.

Desmond Wheatley: But I need to get everybody much more confident with those numbers before we start talking about them publicly. Just one clarification on the same backlog number, the 7.4 million from the US Army and 4.8 million from the DHS. Those numbers are not included in this 22 million, is that correct?

Speaker Change:

I'll tell you what time, you're going to have to come back to me on that because we I'm not sure how much if any of that we've executed on right now.

Speaker Change: Understood. Thanks, I'll step back.

Thank you.

Speaker Change: Our next question comes from Craig Irwin with Roth N. K M. Please go ahead.

Craig Irwin: Hey, Greg how are you.

Speaker Change: Hey, it's Andrew on for Craig and congrats on the continued progress. Thanks, Andrew you talked about on the call a little bit.

Samir Joshi: I'll tell you what, sir, you're going to have to come back to me on that because I'm not sure how much of any of that we've executed on right now. Okay. Okay, thanks. I'll step back a little.

Andrew: Accelerating interest from commercial customers.

Andrew: Government sales in government comes from federal customers has really continued to drive the growth, but can you kind of expand on the opportunities you're seeing with your commercial customers.

Speaker Change: Yes, it's really been across the board I mean, I think we made an announcement that we did we have exceptional so.

Desmond Wheatley: Thank you. Our next question comes from Craig Irwin with Roth MKM. Please go ahead. Hey Craig, how are you?

Speaker Change: Notable things like we've got a large automotive we're not allowed to think about it I know this is really frustrating for people, but a lot of times we get.

Craig Irwin: Hey, it's Andrew on for Craig and congrats on the continued progress. I talked about on the call a little bit, you know, accelerating interest from commercial customers. Government Sales and Federal Customers have really continued to drive the growth. But can you kind of expand on the opportunities you're seeing with your commercial customers? Yeah, it's really been across the board.

Speaker Change: Purchase orders from large commercial customers, who for whatever reason don't want us to name them and as I've said before in these calls I'm not going to upset them and potentially heart future business with them by by doing going against the wishes, but that's.

Speaker Change: That was on the battery side of our business and then on the commercial side or on the on the EV charging and EV arc infrastructure side of our business. We've just seen as I've said quite a significant return to commercial entities ordering these products now since they evaporated almost nothing during COVID-19.

Desmond Wheatley: I mean, I think we made an announcement that we did some sort of notable things like we've got a large automobile we're not allowed to name. By the way, I know this is really frustrating for people. But a lot of times, we get purchase orders from large commercial customers who, for whatever reason, don't want us to name them. And as I've said before, on these calls, I'm not going to upset them and potentially hurt future business with them by going against their wishes.

Speaker Change: And I think that's a trend that we expect to see continue certainly there's a larger percentage of our of the $115 million pipeline now coming from commercial customers and that's really a good thing in my long term feeling is frankly, while it's totally appropriate and there were significant government tail winds at this.

Speaker Change: Periods of the evolution of this industry I do it in the end things that our business will be will end up being more commercially driven than government, but we're very happy to say the government business that.

Desmond Wheatley: But that was on the battery side of our business. And then on the commercial side of our business, the EV charting and EV arc infrastructure side of our business. We've just seen, as I said, quite a significant return to commercial entities ordering these products now since they evaporated to almost nothing during COVID. And I think that's a trend that we expect to see continue. Certainly, there's a larger percentage of our $150 million pipeline now coming from commercial customers, and that's a really good thing.

Speaker Change: For the time being.

Speaker Change: Great. Thank you very much for the color and I'll hop back in queue.

Speaker Change: Thanks, Andrew.

Speaker Change: Our next question comes from Tate Sullivan with Maxim Group. Please go ahead.

Speaker Change: Alright.

Tate H. Sullivan: Hello, Hi doesn't okay.

Tate H. Sullivan: On the U K military the $1 million a quarter.

Less than five months to get that is there you need a similar contract structure for our country in the European Union.

Tate H. Sullivan: Or are there other patents to go to the military orders.

Speaker Change: I'm sure I speak Coincidentally I had the military flying a read when you asked that because I've got a bunch of them a greencore jets language, but I think what you asked me was weaker.

Craig Irwin: And my long-term feeling is, Frankly, while it's totally appropriate that there are significant government tailwinds at this period of the evolution of this industry, I do, in the end, think that our business will end up being more commercially driven than government. But we're very happy to take the government business for the time being. Great, thank you very much for the call, and I'll hop back in the queue.

Speaker Change: Can we use the government contract from which the U K and Woody you called the E V ours in other nations in Europe or will we have to get different contracts with different nations.

Speaker Change: No we cannot.

Speaker Change: I'll keep my political thoughts myself, but especially because break Britain exited the European Union through the Brexit process, there their standalone, where that's gonna start Nevertheless, a fantastic customer.

Speaker Change: I really want to point out by the way that the us winning that U K contract had nothing to do with my National origins, Although I am originally from the U K the better part of it north of the border in Scotland, but but.

Tate H. Sullivan: Thanks, Andrew. Our next question comes from Tate Sullivan with Maxime Group. Please go ahead. Hi Tate,

Tate H. Sullivan: Hello, hi Desmond. In the UK military, the one million order, and it took you less than five months to get that. Do you need a similar contract structure per country in the European Union? Or is there, are there other paths to get military orders?

Speaker Change: I'd actually nothing whatsoever to do with that but it was just the U K is a need for a product like ours, particularly in the overseas bases Cypress is the first of those which were which were executing on we will need to go and get other contracts in other nations and.

And believe me, we're going to do that.

Desmond Wheatley: I'm sorry; I speak. Coincidentally, I had the military flying overhead when you asked that question. I got a bunch of Marine Corps jets flying overhead.

Speaker Change: Part of the good news about the acquisition that we made in Europe is although they haven't been selling our types of products. They have been selling as I said street furniture type infrastructure to government entities for a long time, so they're very well versed versed in this type of thing we're going to go back to all those existing customers and just an add.

Desmond Wheatley: But I think what you asked me was, can we use the government contract from which the UK MOD acquired the EVRs in other nations in Europe? Or will we have to get different contracts for different nations? And the answer is, no, we cannot. I'll keep my political thoughts to myself.

Speaker Change: Our new products in that market it to them, but yes, we will have to go through that process and we will do that because I say, it's been very very useful to us in the U S. In terms of our growth here.

Desmond Wheatley: But especially because Britain exited the European Union through the Brexit process, they're standalone where that's concerned. Nevertheless, a fantastic customer. I really want to point out, by the way, that us winning that UK contract had nothing to do with my national origins, although I am originally from the UK, the better part of it north of the border in Scotland. But it actually had absolutely nothing whatsoever to do with that.

Speaker Change: And I think that you that you European Union and broader Europe will will probably be more government facing where infrastructure is concerned even in the U S is so it's a it's a it's a challenge for us, but one thing that we've learned is when we win one of these types of contracts, it's always easier to win others, because theres a kind of a nobody wants to be first to be second thing in government, but also much of.

Speaker Change: The work that you have to do in winning one of them is very much a copy and paste it into the other applications for other types of things and most of them are very similar qualification requirements. So if we qualify for one it's unlikely that we wouldn't qualify for others.

Desmond Wheatley: It was just the UK has a need for products like ours, particularly in their overseas bases. Cyprus is the first of those which we're executing on. We will need to go and get other contracts in other nations. And believe me, we're going to do that. And part of the good news about the acquisition that we made in Europe is, although they haven't been selling our types of products, they have been selling, as I said, street furniture-type infrastructure to government entities for a long time. So they're very well versed in this type of thing.

Speaker Change: Thank you Doug.

Doug: Thanks, Dave.

Speaker Change: So we're not time, though but I am prepared to go over for a few minutes. If there. If there are any other analyst questions. Otherwise, we can I know you're all very busy so we can call it a close.

Speaker Change: Close.

Okay, operator that sounds like that's it. Thank you everybody for your attention as you can know ducktail on being bullish about being go without more bullish than I've ever been where we're a far bigger and much much better company than we were just a short period of time to go and we're only going to get a whole lot better from here or so.

Desmond Wheatley: We're going to go back to all those existing customers and just add our new products in that market to them. But yes, we will have to go through that process, and we will do that because, as I say, it's been very, very useful to us in the US in terms of our growth this year. And I think the European Union and broader Europe will probably be more government-oriented where infrastructure is concerned, even in the US.

Speaker Change: Thank you for your continued support and interest and as always feel free to get directly in touch with the company or with our IR firm core IR anytime you have any other questions or thought we'd love to hear from you. Thank you very much.

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

Desmond Wheatley: So it's a challenge for us. But one thing that we've learned is when we win one of these types of contracts, it's always easier to win others because there's a kind of nobody wants to be first to be second thing in government. But also, much of the work that you have to do in winning one of them is very much copy and pasteable into other applications for other types of things. And most of them have very similar qualification requirements. So if we qualify for one, it's unlikely that we wouldn't qualify for others.

Speaker Change: [noise].

Operator: Thank you, Desmond. So we're at time now, but I'm prepared to go over for a few minutes if there are any other analyst questions. Otherwise, I know you're all very busy, so we can call it a close. Okay, operator. That sounds like it. That's it.

Speaker Change: Yes.

Speaker Change: [music].

Desmond Wheatley: Thank you, everybody, for your attention. As you can no doubt tell, I remain bullish about Beam Global, in fact, more bullish than I've ever been. We're a far bigger and much, much better company than we were just a short period of time ago, and we're only going to get a whole lot better from here on out. So thank you for your continued support and interest. And, as always, feel free to get directly in touch with the company or with our IR firm, CoreIR.

Speaker Change: Yeah.

[music].

Desmond Wheatley: Anytime you have any other questions or thoughts, we'd love to hear from you. Thank you very much. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Tate Sullivan, Scott Gordon, Christopher Souther, Unknown Executive, Unknown Attendee, Abhishek Sinha, Tyler DiMatteo, Desmond Wheatley, Craig Irwin, Lisa Potok, Beam Global, [inau