Q2 2024 Beam Global Earnings Call

Good day, and welcome to the BEAM Global Second Quarter 2024 Operating Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: Operating Results Conference Call. All participants will be in a listen-only mode.

Operator: or Operating Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: 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. To ask a question, you may press the star key, then 1 on your touchtone phone.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded.

Speaker Change: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touch-tone phone. To withdraw your question, please press star, then 2.

Lisa Potok: I would now like to turn the conference over to Lisa Potok, Chief Financial Officer. Please go ahead. Hi, good afternoon, and thank you for participating in Beam Global's second quarter of 24 operating results conference call. We appreciate you joining us today to hear an update on our business. Joining me is Desmond Wheatley, our President, CEO and Chairman of Beam. Desmond will be providing an update on recent activities that Beam, followed by a question and answer section.

Operator: To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Lisa Potok, Chief Financial Officer. Please go ahead.

Speaker Change: Please note this event is being recorded. I would now like to turn the conference over to Lisa Potok, Chief Financial Officer. Please go ahead.

Lisa Potok: Hi, good afternoon, and thank you for participating in Beam Global's second quarter of 24 operating results conference call. We appreciate you joining us today to hear an update on our business. Joining me is Desmond Wheatley, our President, CEO, and Chairman of BEAM.

Lisa Potok: Hi, good afternoon and thank you for participating in BEAM Global's second quarter of 24 operating results conference call. We appreciate you joining us today to hear an update on our business.

Lisa Potok: Joining me is Desmond Wheatley, our president, CEO, and chairman of BEAM. Desmond will be providing an update on recent activities at BEAM, followed by a question and answer section.

Lisa Potok: Desmond will be providing an update on recent activities at Beam, followed by a question and answer section. But first, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address BEAM's expectations for future performance and operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in BEAM's most recently filed Form 10-K and other periodic reports filed with the SEC.

Lisa Potok: But first, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance and operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed Form 10-K and other periodic reports filed with the SEC.

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 BEAM's expectations for future performance and operational results.

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

Speaker Change: For more information about these risks, please refer to the risk factors described in BEAM's most recently filed Form 10-K and other periodic reports filed with the SEC.

Lisa Potok: The content of this call contains time-sensitive information that is accurate only as of today, August 13, 2024, except as required by law. Beam describes any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

Lisa Potok: The content of this call contains time-sensitive information that is accurate only as of today, August 13, 2024. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Next, I would like to provide an overview of our financial results for the second quarter of 24. Our second quarter revenues were $14.8 million. It's increasing 2% over Q1 of 2024. 31% of our revenue in the second quarter was derived from commercial customers. For the six months ended June 30th, 24, our revenues were $29.4 million.

Speaker Change: The content of this call contains time-sensitive information that is accurate only as of today, August 13, 2024.

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

Lisa Potok: Next, I would like to provide an overview of our financial results for Beam's second quarter of 24. Our second quarter revenues are 14.8 million. It's increasing 2% over Q1 of 24. 31% of our revenue and second quarter was derived from commercial customers. For the six months ended June 30th of 24, our revenues were 29.4 million. We have a backlog of 11 million, and our pipeline of prospective customers has increased to over 183 million. Although we cannot be sure when or if those prospective orders will turn into actual sales. We generated a record gross margin for the second quarter in a row, with a gross margin of 16%.

Speaker Change: Next, I would like to provide an overview of our financial results for being second quarter of twenty-four.

Speaker Change: Our second quarter revenues are $14.8 million. It's increasing 2% over Q1 of 2024.

Speaker Change: 31% of our revenue in second quarter was derived from commercial customers.

Speaker Change: For the six months ended June 30th of 24, our revenues were $29.4 million.

Lisa Potok: We have a backlog of 11 million, and our pipeline of prospective customers has increased to over 183 million. However, we cannot be sure of when or if those prospective orders will turn into actual sales. We generated a record gross margin for the second quarter in a row, with a gross margin of 16%. The gross margin improved 6 percentage points compared to Q1. Our gross profits included $300,000 for non-cash depreciation and intangible amortization, which negatively impacts our profits.

Speaker Change: We have a backlog of 11 million and our pipeline of prospective customers has increased to over 183 million.

Speaker Change: Although we cannot be sure of when or if those prospective orders will turn into actual sales.

Speaker Change: We generated a record gross margin for the second quarter in a row with a gross margin of 16%.

Lisa Potok: The margin improved 6 percentage points compared to Q1 of 24. Our gross profits included a 300,000 for non-cash depreciation and intangible amortization, which negatively impacts our profits. Net of these non-cash items, our gross margin was 18%. For the six months ended June 30th of 24, our gross profit was 3.8 million or 13% of sales. Our six month gross profits included a negative impact of 0.6 million for non-cash depreciation and intangible amortization. Our six month gross profits net of these non-cash items was 15%. The improvement in their gross margin is primarily because we are able to recognize the engineering design changes to our EV arc that resulted in cost reductions to our bill of materials as well as labor efficient.

Speaker Change: The margin improved 6 percentage points compared to Q1 of 24. Our gross profits included a $300,000 for non-cash depreciation and intangible amortization, which negatively impacts our profits.

Lisa Potok: Net of these non-cash items, our gross margin was 18%. For the six months ended June 30th of 24, our gross profit was $3.8 million, or 13% of sales. Our six-month gross profits included a negative impact of $0.6 million for non-cash depreciation and intangible amortization.

Speaker Change: Net of these non-cash items, our gross margin was 18%.

Speaker Change: For the six months ended June 30th of 24, our gross profit was $3.8 million or 13% of sales.

Speaker Change: Our six-month gross profits included a negative impact of $0.6 million for non-cash depreciation and intangible amortization.

Lisa Potok: Our six-month growth profits net of these non-cash items was 15%. The improvement in our gross margin is primarily because we were able to recognize the engineering design changes to our EV arc that resulted in cost reductions to our bill of materials as well as labor efficiency. Additionally, there were reductions in material costs as well as operational improvements and positive margins generated from the acquisition of Amiga. Our engineering and operations team continue to identify further cost reductions and efficiencies, which, along with the support from our Serbian facilities, we believe will improve our gross margins in future quarters, more so than for our operating expenses.

Speaker Change: Our six-month growth profits net of these non-cash items was 15%.

Speaker Change: The improvement in our gross margin is primarily because we were able to recognize the engineering design changes to our EV arc that resulted in cost reductions to our bill of materials as well as labor efficiencies.

Lisa Potok: Services. Additionally, there were reductions in material costs, as well as operational improvements and positive margins generated from the acquisition of Amiga.

Speaker Change: Additionally, there were reductions in material costs as well as operational improvements and positive margins generated from the acquisition of Amiga.

Lisa Potok: Our engineering and operations team continue to identify further cost reductions and efficiencies which, along with the support from our Serbian facilities, we believe will improve our growth margins in future quarters.

Speaker Change: Our engineering and operations team continue to identify further cost reductions and efficiencies which, along with the support from our Serbian facilities, we believe will improve our gross margins in future quarters.

Lisa Potok: Then, for our operating expenses. For Q224 with 7.1 million compared to 4.5 million in Q1 of 24, the 2.6 million increase is primarily related to a 1.8 million expense related to the change in the fair value of the contingent consideration, which is non-cash for the Amiga acquisition. We also had 300,000 for operating expenses in the quarter for Beam Europe, and then we had 600,000 for commission expenses. Commissions are paid when receivables are collected. Our operating expenses for the 6 months in being Q224 was 11.7 million. These operating expenses included 1.5 million related to the change in the Amiga acquisition, which again is non-cash, and 900,000 for the operating expenses of Beam Europe.

Lisa Potok: For Q2-24, revenue was $7.1 million, compared to $4.5 million in Q1-24. The $2.6 million increase is primarily related to a $1.8 million expense related to the change in the fair value of the contingent consideration, which is non-cash, for the Amiga acquisition.

Speaker Change: Then, for our operating expenses, for Q2-24 was $7.1 million compared to $4.5 million in Q1-24.

Speaker Change: The $2.6 million increase is primarily related to a $1.8 million expense related to the change in the fair value of the contingent consideration, which is non-cash, for the Amiga acquisition.

Lisa Potok: We also had $300,000 for operating expenses in the quarter for Beam Europe, and then we had $600,000 for commission expenses, which are paid when receivables are collected. Our operating expenses for the six months ending Q2-24 were $11.7 million. These operating expenses included $1.5 million related to the change in the fair value of contingent consideration for the Amiga acquisition, which again is non-cash, and $900,000 for the operating expenses of Beam Europe. The net loss was $4.9 million for the second quarter of 2014.

Speaker Change: We also had $300,000 for operating expenses in the quarter for BEAM Europe, and then we had $600,000 for commission expenses.

Speaker Change: Commissions are paid when receivables are collected.

Speaker Change: Our operating expenses for the six months ending Q2-24 was $11.7 million.

Speaker Change: These operating expenses included $1.5 million related to the change in the fair value of contingent consideration for the AMIGA acquisition, which again is non-cash, and $900,000 for the operating expenses of BEAM Europe.

Lisa Potok: The net loss was 4.9 million for the second quarter of 24. The second quarter net loss included non-cash expense items related to depreciation, intellectual property amortization, non-cash compensation, or allowance for bad debt, and the fair value of the contingent consideration expense of 2.8 million in 2024. Net loss excluding the non-cash items would have been 2.1 million or 14 cents per share for Q2 of 24. The net loss was 8 million for the 6 months in the June of 24. The net loss includes non-cash expense items of 3.5 million in 2024, and the net loss excluding those non-cash items was 4.4 million for the 6 months in the Q2 of 24.

Lisa Potok: The second quarter net loss included non-cash expense items related to depreciation, intellectual property amortization, non-cash compensation, our allowance for bad debt, and the fair value of the contingent consideration expense of $2.8 million in 2024. Net loss excluding the non-cash items would have been $2.1 million or $0.14 per share for Q2 of 2024. The net loss was $8 million for the six months ended June of 2014. The net loss includes non-cash expense items of $3.5 million and $24.

Speaker Change: The net loss was $4.9 million for the second quarter of 2024.

Speaker Change: The second quarter net loss included non-cash expense items related to depreciation, intellectual property amortization, non-cash compensation, our allowance for bad debt, and the fair value of the contingent consideration expense of $2.8 million in 2024.

Speaker Change: Net loss, excluding the non-cash items, would have been $2.1 million or $0.14 per share for Q2 of 2024.

Speaker Change: The net loss was $8 million for the six months ended June of 2014.

Speaker Change: The net loss includes non-cash expense items of $3.5 million in 2024, and the net loss excluding those non-cash items was $4.4 million for the six months ended Q2 of 2024.

Lisa Potok: And the net loss excluding those non-cash items was $4.4 million for the six months ended Q2 of 24. Our cash balance at the end of Q2 of 24 was $8.7 million, compared to $5 million at the end of Q1 of 24, and this is mainly related to the increased collections from our customers during the quarter. At the end of December 2023, we had cash of $10.4 million. The cash decrease between Q4 of 23 and Q2 of 24 was primarily due to the cash payments for the acquisition of Amiga for $2.7 million that we did in early Q1 of 24.

Lisa Potok: Our cash balance at Q2 of 24 was 8.7 million compared to 5 million at the end of Q1 of 24, and this is mainly related to the increased collections from our customers during the quarter. At the end of December 2023, we had cash of 10.4 million. The cash decrease between Q4 of 23 and Q2 of 24 was primarily due to the cash payments for the acquisition of Amiga of 2.7 million that we did in early Q1 of 24. Our net cash used for operating activities for the period ending Q2 of 24 was 100,000. We continue to be debt-free other than some small auto leases and have 100 million line of credit that's readily available.

Speaker Change: Our cash balance at Q2 of 24 was $8.7 million, compared to $5 million at the end of Q1 of 24, and this is mainly related to the increased collections from our customers during the quarter.

Speaker Change: At the end of December 2023, we had cash of $10.4 million.

Speaker Change: The cash decrease between Q4 of 23 and Q2 of 24 was primarily due to the cash payments for the acquisition of Amiga of $2.7 million that we did in early Q1 of 24.

Lisa Potok: Our net cash use for operating activities for the period ending Q2 of 24 was $100,000. We continue to be debt-free, other than some small auto leases, and have a $100 million line of credit that's readily available. Our working capital of $16 million decreased $7.8 million from Q4 of 23 to Q2 of 24, mainly due to the accrual of the non-cash contingent consideration for the Amiga acquisition of $5.4 million. This moves to current liabilities as of Q2 of 24 from non-current liabilities at Q4 of 23.

Speaker Change: Our net cash use for operating activities for the period ending Q2 of 24 was $100,000.

Speaker Change: We continue to be debt-free, other than some small auto leases, and have a $100 million line of credit that's readily available.

Lisa Potok: Our working capital of 16 million decreased 7.8 million from Q4 of 23 to Q2 of 24, mainly due to the accrual of the non-cash consideration for the Amiga acquisition of 5.4 million. This moved to current liabilities as of Q2 of 24 from non-current liabilities at Q4 of 23. This contingent consideration is a non-cash urn out based on revenue targets payable with shares of the company's common stock. Additionally, the decrease was due to the 2.7 million that I've mentioned previously for the cash payment for the Amiga acquisition in early Q1 24, which was in current liabilities at the end of Q4 of 23.

Speaker Change: Our working capital of $16 million decreased $7.8 million from Q4 of 23 to Q2 of 24, mainly due to the accrual of the non-cash contingent consideration for the Amiga acquisition of $5.4 million.

Speaker Change: This moves to current liabilities as of Q2 of 24 from non-current liabilities at Q4 of 23.

Lisa Potok: This contingent consideration is a non-cash earn-out based on revenue targets payable with shares of a company's common stock. Additionally, the decrease was due to the $2.7 million that I mentioned previously for the cash payment for the Amiga acquisition in early Q1'24, which was in current liabilities at the end of Q4'23. Our working capital, net of non-cash items, was $21.4 million at the end of Q2 of 2024. I will now turn the call over to Desmond to provide a business update. Thank you, Lisa.

Speaker Change: This contingent consideration is a non-cash earn-out based on revenue targets payable with shares of the company's common stock.

Speaker Change: Additionally, the decrease was due to the $2.7 million that I mentioned previously for the cash payment for the Amiga acquisition in early Q1'24, which was in current liabilities at the end of Q4'23.

Lisa Potok: Our working capital, net of non-cash items, was 21.4 million at the end of Q2 of 24.

Speaker Change: Our working capital, net of non-cash items, was $21.4 million at the end of Q2 of 2024.

Desmond Wheatley: I will now turn the call over to Desmond to provide a business update. Thank you, Lisa, and thank you to all of the rest of you for joining this call. Q2 has been another very busy quarter for Beam Global, with a whole series of new milestones and records.

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

Desmond Wheatley: Thank you to all of the rest of you for joining this call. Q2 has been another very busy quarter for Beam Global with a whole series of new milestones and records. Since our last earnings call, I've personally spent almost half of my time traveling and most of that time in Europe, although I did have a very eventful couple of weeks in Washington, D.C., meeting with leaders on the Hill. My European travel was largely about meeting new customers and investors, but also very gratifyingly visiting locations where the first EV arcs produced by Beam Europe have been deployed.

Speaker Change: i

Desmond Wheatley: Thank you, Lisa.

Desmond Wheatley: Thank you to all of the rest of you for joining this call. Q2 has been another very busy quarter for Beam Global with a whole series of new milestones and records.

Desmond Wheatley: Since our last earnings call, I've personally spent almost half of my time traveling, and most of that time in Europe, although I did have a very eventful couple of weeks in Washington, DC, meeting with leaders on the Hill. My European travel was largely about meeting new customers and investors, but also very gratifyingly, visiting locations where the first EV arcs produced by Beam Europe have been deployed. Just to give you an idea of the scope of our new reach during my latest trip, from which I just returned two weeks ago, I visited Washington, DC, London, Belgrade, Budapest, Vienna, Larnaca and Nicosia on Cyprus, and Valletta and Gozo on Malta.

Speaker Change: Since our last earnings call, I've personally spent almost half of my time traveling and most of that time in Europe, although I did have a very eventful couple of weeks in Washington DC meeting with leaders on the Hill.

Speaker Change: My European travel was largely about meeting new customers and investors, but also, very gratifyingly, visiting locations where the first EV arcs produced by Beam Europe have been deployed.

Desmond Wheatley: Just to give you an idea of the scope of our new reach, during my latest trip, from which I just returned two weeks ago, I visited Washington, DC, London, Belgrade, Budapest, Vienna, Larnaca, and Nicosia on Cyprus, and Valletta and Goza on Malta.

Speaker Change: Just to give you an idea of the scope of our new reach, during my latest trip, from which I just returned two weeks ago, I visited Washington DC, London, Belgrade, Budapest, Vienna, Larnaca and Nicosia on Cyprus, and Valletta and Goza on Malta.

Desmond Wheatley: I wasn't in any of those locations for fun, although I did have a fantastic time telling the Beam story and promoting our products and our stock to leaders in government, industry, the military, and the investment community. As diverse as that list of locations may sound, what's fascinating is that they all have in common more or less the same challenges and requirements as we've observed and for which we've designed a portfolio of fantastic products here in the United States. They all need EV charging faster than traditional methods can provide it. They all need to save money on construction and utility bills.

Desmond Wheatley: I wasn't in any of those locations for fun, although I did have a fantastic time telling the Beam story and promoting our products and our stock to leaders in government, industry, the military, and the investment community. As diverse as that list of locations may sound, what's fascinating is that they all have in common, more or less, the same challenges and requirements as we've observed, and for which we've designed a portfolio of fantastic products here in the United States. The only EV charging faster than traditional methods can provide it. They only to save money on construction and utility bills.

Desmond Wheatley: They all have challenges with the lack of capacity on the grid, and they're all very worried about what's going to happen to transportation, communications, and industry during future potentially very prolonged blackouts. Beam Global's products solve these challenges, and now that we manufacture in the United States and in Europe, we're servicing the largest addressable markets in the world. In the time since I last spoke to you, we've delivered products in the United States to California, Tennessee, Kentucky, Indiana, Maryland, Virginia, Pennsylvania, Puerto Rico, Texas, Ohio, Utah, Hawaii, New York, North Carolina, Minnesota, Wisconsin, Arizona, Colorado, New Mexico, Illinois, Iowa, and Nevada.

Speaker Change: I wasn't in any of those locations for fun, although I did have a fantastic time telling the BEAM story and promoting our products and our stock to leaders in government, industry, the military and the investment community.

Speaker Change: As diverse as that list of locations may sound, what's fascinating is that they all have in common more or less the same challenges and requirements as we've observed and for which we've designed a portfolio of fantastic products here in the United States.

Speaker Change: The only DB charting faster than traditional methods can provide it.

Desmond Wheatley: They all have challenges with lack of capacity on the grid, and they're all very worried about what's going to happen to transportation, communications, and industry during future potentially very prolonged blackouts. Beam Global's products solve for these challenges, and know that we manufacture in the United States and in Europe. We're servicing the largest addressable markets in the world. In the time since I last spoke to you, we've delivered products in the United States to California, Tennessee, Kentucky, Indiana, Maryland, Virginia, Pennsylvania, Puerto Rico, Texas, Ohio, Utah, Hawaii, New York, North Carolina, Minnesota, Wisconsin, Arizona, Colorado, New Mexico, Illinois, Iowa, and Nevada.

Speaker Change: They all need to save money on construction and utility bills. They all have challenges with lack of capacity on the grid. And they're all very worried about what's going to happen to transportation, communications and industry during future potentially very prolonged blackouts.

Beam Global: Beam Global's products solve for these challenges, and now that we manufacture in the United States and in Europe, we're servicing the largest addressable markets in the world.

Beam Global: In the time since I last spoke to you, we've delivered products in the United States to California, Tennessee, Kentucky, Indiana, Maryland, Virginia, Pennsylvania, Puerto Rico, Texas, Ohio, Utah, Hawaii, New York, North Carolina, Minnesota, Wisconsin, Arizona, Colorado, New Mexico, Illinois, Iowa, and Nevada.

Desmond Wheatley: And in Europe, we ship to Serbia, Slovenia, Croatia, Greece, Romania, Cyprus, Montenegro, and Bosnia. Over half of our new orders in the second quarter came from brand new customers, expanding our ever-growing customer base. They included two major new California public transportation providers, a global supplier of advanced mobility products and systems, the Sacramento Municipal Utility District, or SMUD, the U.S. Federal Railroad Administration, and also importantly, a leader in U.S. data centers who boss our products primarily for energy security and to relieve their lack of capacity on the grid problem, which is an increasingly important area of business for us.

Desmond Wheatley: And in Europe, we ship to Serbia, Slovenia, Croatia, Greece, Romania, Cyprus, Montenegro, and Bosnia. Over half of our new orders in the second quarter came from brand new customers, expanding our ever growing customer base. They included two major new California public transportation providers, a global supplier of advanced mobility products and systems, the Sacramento Municipal Utility District, or SMUD, the U.S. Federal Railroad Administration, and also importantly, a leader in U.S. data centers who bought our products primarily for energy security and to relieve their lack of capacity on the grid problem, which is an increasingly important area of business for us.

Beam Global: In Europe, we ship to Serbia, Slovenia, Croatia, Greece, Romania, Cyprus, Montenegro, and Bosnia.

Beam Global: Over half of our new orders in the second quarter came from brand new customers, expanding our ever-growing customer base.

Beam Global: They included two major new California public transportation providers, a global supplier of advanced mobility products and systems, the Sacramento Municipal Utility District or SMUD.

Beam Global: the U.S. Federal Railroad Administration, and also, importantly, a leader in U.S. data centers who bought our products primarily for energy security and to relieve their lack of capacity on the grid problem, which is an increasingly important area of business for us.

Desmond Wheatley: One of the new customers we're most excited about is the British Ministry of Defence. Not surprisingly, they face the same challenges and opportunities experienced by our largest customer, the United States military. Earlier this year, we were awarded a contract by Crown Commercial Services, which is very similar to the General Services Administration contract we have with the US federal government in that allows the United Kingdom's government to buy our products without having to go through any further competitive process. The British Army immediately made use of that contract and purchased ten EVR systems to be deployed on the island of Cyprus at four separate British sovereign military bases.

Desmond Wheatley: One of the new customers we're most excited about is the British Ministry of Defense. Not surprisingly, they face the same challenges and opportunities experienced by our largest customer, the United States military. Earlier this year, we were awarded a contract by Crown Commercial Services, which is very similar to the General Services Administration contract we have with the U.S. federal government in that it allows the United Kingdom's government to buy our products without having to go through any further competitive process. The British Army immediately made use of that contract and purchased 10 EV arc systems to be deployed on the island of Cyprus at four separate British sovereign military bases.

Beam Global: One of the new customers we're most excited about is the British Ministry of Defence.

Beam Global: Not surprisingly, they face the same challenges and opportunities experienced by our largest customer, the United States military.

Beam Global: Earlier this year, we were awarded a contract by Crown Commercial Services, which is very similar to the General Services Administration contract we have with the U.S. federal government, in that it allows the United Kingdom's government to buy our products without having to go through any further competitive process.

Beam Global: The British Army immediately made use of that contract and purchased 10 EV arc systems to be deployed on the island of Cyprus at four separate British Sovereign Military Bases.

Desmond Wheatley: Those EVR systems were shipped from our Beam Europe facilities, and the deployments were completed just last week.

Desmond Wheatley: Those EV Arc systems were shipped from our Beam Europe facilities, and the deployments were completed just last week. You may have seen the press release this morning or seen some of the other media coverage on this promoted by the British Army. I visited those bases during my trip to Cyprus, and I'm very enthusiastic about the future opportunities to do a lot more with the UK military, not only on Cyprus but, I hope, at other overseas bases as well.

Beam Global: Those EV Arc systems were shipped from our BEAM Europe facilities and the deployments were completed just last week. You may have seen the press release this morning or seen some of the other media coverage on this promoted by the British Army.

Desmond Wheatley: You may have seen the press release this morning or seen some of the other media coverage on this promoted by the British Army. I visited those bases during my trip to Cyprus, and I'm very enthusiastic about the future opportunities to do a lot more with the UK. Not only on Cyprus, but I hope, at other overseas bases as well. Everyone involved is excited that the Commander, British Forces Cyprus, who drives an electric Land Rover, now parks that vehicle on an EVR every morning when he arrives at work, and all of his driving is now driving on sunshine powered by Beam Global products.

Speaker Change: I visited those bases during my trip to Cyprus and I'm very enthusiastic about the future opportunities to do a lot more with the UK military not only on Cyprus but I hope at other overseas bases as well.

Desmond Wheatley: Everyone involved is excited that the commander, British Forces Cyprus, who drives an electric Land Rover, now parks that vehicle on an EV arc every morning when he arrives at work, and all of his driving is now powered by sunshine, powered by Beam Global products. We continue to do some really interesting stuff through our battery division. We were awarded a contract to do a custom industrial battery design for a major multinational conglomerate.

Speaker Change: Everyone involved is excited that the commander, British Forces Cyprus, who drives an electric Land Rover, now parks that vehicle on an EV arc every morning when he arrives at work and all of his driving is now driving on sunshine powered by Beam Global Products.

Desmond Wheatley: We continue to do some really interesting stuff through our battery division. We were awarded a contract to do a custom industrial battery design for a major multinational conglomerate, and we're hopeful that these initial design prototypes will lead to production level quantities delivered to them at a later date. Our specialized battery technology is being placed in wildfire detection systems now being placed in vulnerable wilderness areas, and we're also developing quote site batteries for a major automotive OEM's motor sports division.

Speaker Change: We continue to do some really interesting stuff through our battery division. We were awarded a contract to do a custom industrial battery design for a major multinational conglomerate and we're hopeful that these initial design prototypes will lead to production level quantities delivered to them at a later date.

Desmond Wheatley: And we're hopeful that these initial design prototypes will lead to production-level quantities delivered to them at a later date. Our specialized battery technology is being placed in wildfire detection systems now being placed in vulnerable wilderness areas, and we're also developing prototype batteries for a major automotive OEM's motorsports division. But in my opinion, the most interesting strategic maneuver for Beam Global since we last talked has been the signing of our first distribution agreement with Jesse Group, a Spanish logistics, engineering, and technology firm that focuses on transportation, energy, aviation, and military applications. Jesse will distribute our products throughout Spain, Portugal, and the Spanish-speaking Caribbean.

Speaker Change: Our specialized battery technology is being placed in wildfire detection systems, now being placed in vulnerable wilderness areas, and we're also developing prototype batteries for a major automotive OEM's motorsports division.

Desmond Wheatley: In my opinion, the most interesting strategic maneuver for Beam Global since we last sought has been the signing of our first distribution agreement with Jesse Group, a Spanish logistics, engineering and technology firm which focuses on transportation, energy, aviation, and military applications. Jesse will distribute our products throughout Spain, Portugal, and Spanish beating Caribbean. They will also provide after sale service, expanding not only our selling footprint, but also our ability to provide service to our customers in ever larger geographical environments. As we say in Scotland, the proof is in the pudding, and the pudding in this case is that we've just received our first order from Jesse just one week after putting the distribution agreement in place.

Desmond Wheatley: They will also provide after-sales service, expanding not only our selling footprint but also our ability to provide service to our customers in an ever larger geographical area. As we say in Scotland, the proof is in the pudding, and the pudding in this case is that we just received our first order from Jesse just one week after putting the distribution agreement in place. This purchase order is for EV Arc Systems, which will be deployed in the Dominican Republic.

Speaker Change: But in my opinion, the most interesting strategic maneuver for Beam Global since we last talked has been the signing of our first distribution agreement with Jesse Group, a Spanish logistics, engineering, and technology firm which focuses on transportation, energy, aviation, and military applications.

Speaker Change: Jesse will distribute our products throughout Spain, Portugal and the Spanish-speaking Caribbean. They will also provide after-sales service expanding not only our selling footprint but also our ability to provide service to our customers in ever-larger geographical environments.

Speaker Change: As we say in Scotland, the proof is in the pudding, and the pudding in this case is that we've just received our first order from Jesse, just one week after putting the distribution agreement in place.

Desmond Wheatley: This purchase order is for EVR systems, which will be deployed in the Dominican Republic. I can't give any more detail on that on this point, but it is nonetheless a significant validation, not only of our relationship with Jesse, but with a broader strategy of adding sales resources, which are not directly employed by Beam Global and therefore do not contribute to our overhead expenses. We intend to expand on this strategy, adding distributors, resellers, and agents across Europe and also across the United States. Until now, all of our sales have been made through our direct sales team, and they've done a fantastic job. But we've matured our product and our sales and marketing collateral to a point now where we can engage third parties, train them, and have them expose our products to a much larger audience, often with whom they already have existing relations.

Desmond Wheatley: I can't give any more detail on that at this point, but it is nonetheless a significant validation, not only of our relationship with Jesse but with a broader strategy of adding sales resources which are not directly employed by Beam Global and therefore do not contribute to our overhead. We intend to expand on this strategy, adding distributors, resellers, and agents across Europe and also across the United States. Until now, all of our sales have been made through our direct sales team, and they've done a fantastic job.

Speaker Change: This purchase order is for EV Arc Systems, which will be deployed in the Dominican Republic.

Speaker Change: I can't give any more detail on that on this point, but it is nonetheless a significant validation not only of our relationship with Jesse, but with a broader strategy of adding sales resources which are not directly employed by Beam Global and therefore do not contribute to our overhead expenses.

Speaker Change: We intend to expand on this strategy, adding distributors, resellers and agents across Europe and also across the United States.

Desmond Wheatley: But we've matured our product and our sales and marketing collateral to a point now where we can engage third parties, train them, and have them expose our products to a much larger audience, often with whom they already have existing relationships. And we do that without adding to our SG&A burden, is performing, and we're executing solidly on our strategic plan. In Q1 of 2024, we generated more revenue than any first quarter in our history, and our second quarter revenues, while not a record for the quarter, were higher again than the first quarters, at $14.8 million.

Speaker Change: Up till now, all of our sales have been made through our direct sales team, and they've done a fantastic job, but we've matured our product and our sales and marketing collateral to a point now where we can engage third parties, train them, and have them expose our products to a much larger audience, often with whom they already have existing relationships.

Desmond Wheatley: And we do that without adding to our SG&A burden.

Desmond Wheatley: Beam Global is performing, and we're executing solidly on our strategic plan. In Q1 of 2024, we generated more revenue than any first quarter in our history, and our second quarter revenues, while not a record for the quarter, were higher again than the first quarters at 14.8 million. Our growth profits in the first quarter were also higher than at any time in our history, but the Beam team solidly broke that record in the second quarter, generating more growth profits than ever before. Excluding non-ice cash items, as Lisa has already discussed, we generated about 2.7 million growth profits in the first quarter, or approximately 18% growth margin after non-cash items. That's up from 1.8 million in Q1, or 10.1%.

Speaker Change: And we do that without adding to our SG&A burden.

Speaker Change: Beam Global is performing and we're executing solidly on our strategic plan.

Speaker Change: In Q1 of 2024, we generated more revenue than any first quarter in our history and our second quarter revenues, while not a record for the quarter, were higher again than the first quarters at $14.8 million.

Desmond Wheatley: Our gross profits in the first quarter were also higher than at any time in our history, but the Beam team solidly broke that record in the second quarter, generating more gross profits than ever before. Excluding non-cash items, as Lisa has already discussed, we generated about $2.7 million in gross profit in the first quarter, or approximately 18% gross margin after non-cash items.

Speaker Change: Our gross profits in the first quarter were also higher than at any time in our history, but the BEAM team solidly broke that record in the second quarter, generating more gross profits than ever before.

Speaker Change: Excluding non-cash items, as Lisa has already discussed, we generated about $2.7 million in gross profit in the first quarter, or approximately 18% gross margin after non-cash items. That's up from $1.8 million in Q1, or 10.1%.

Desmond Wheatley: That's up from 1.8 million in Q1, or 10.1%. That gross margin did not benefit from the 8.25% price increase that we announced last year on about 80% of the EV arc systems we deployed in the quarter. I said another way, we still have a lot of positive impact coming from that price increase, which should contribute to further improvements in our gross profitability as we work through the last of the backlog prices before they increase again. Our Q2 net losses, excluding non-cash items, were approximately $2.1 million, or around three quarters of our gross profit contribution in the quarter.

Desmond Wheatley: Now that growth margin did not reflect benefit from the 8 and a quarter percent price increase that went out last year, on about 80% of the EV arc systems we deployed in the quarter. And said another way, we still have a loss of positive impact coming from that price increase, which should contribute to further improvements in our growth profitability as we work through the last of the backlog price before they increase. Our Q2 net losses, including non-cash items, were approximately 2.1 million dollars, or around three quarters of our growth profit contribution in the quarter. In the first quarter, the loss was two times our growth, and Q2 it was just three quarters.

Speaker Change: Now that gross margin did not reflect benefit from the 8.25% price increase that we announced last year on about 80% of the EV arc systems we deployed in the quarter.

Speaker Change: I said another way, we still have a lot of positive impact coming from that price increase, which should contribute to further improvements in our gross profitability as we work through the last of the backlog price before they increase.

Speaker Change: Our Q2 net losses, excluding non-cash items, were approximately $2.1 million, or around three quarters of our gross profit contribution in the quarter.

Desmond Wheatley: In the first quarter, the loss was two times our growth. In Q2, it was just three quarters. You can see the trend here. Analysts' consensus had us at a 21 cent loss per share for the quarter. Our loss, excluding non-cash items, which were not built into their models, was approximately 14 cents.

Speaker Change: In the first quarter, the loss was two times our growth. In Q2, it was just three quarters. You can see the trend here.

Desmond Wheatley: You can see the trend here. Analysts' consensus had us at a 21 cent loss per share for the quarter. Our loss excluding non-cash items, which were not built into their models, was approximately 14 cents, so our non-GAAP performance at the bottom line was considerably better than the expectations on the street. This is a result of our laser focus on profitability as we continue to reduce our cost of goods sold through engineering and operational improvements. Of course, as our price increase takes full effect, we believe will continue to see further margin improvements, and that we're well positioned to hit that very important milestone.

Speaker Change: Analysts' consensus had us at a 21 cent loss per share for the quarter. Our loss excluding non-cash items which were not built into their models was approximately 14 cents, so our non-GAAP performance at the bottom line was considerably better than the expectations on the street.

Desmond Wheatley: So our non-GAAP performance at the bottom line was considerably better than the expectations on the street. This is a result of our laser focus on profitability as we continue to reduce our cost of goods sold through engineering and operational improvement. Of course, as our price increase takes full effect, we believe we'll continue to see further margin improvements and that we're well positioned to hit that very important milestone. Our models show that if we continue this gross margin improvement on a similar level of revenues and make a few other minor adjustments, we will generate positive cash, exiting the year with a gross margin that's better than double where it was at the end of Q1 is our goal for 20

Speaker Change: This is a result of our laser focus on profitability as we continue to reduce our cost of goods sold through engineering and operational improvements.

Speaker Change: Of course, as our price increase takes full effect, we believe we'll continue to see further margin improvements and that we're well positioned to hit that very important milestone.

Desmond Wheatley: Our model shows that if we continue to scroll's margin improvement on a similar level of revenues and make a few other minor adjustments, we'll generate positive cash flow. Exiting the year with a growth margin that's better than double where it was at the end of Q1 is our goal for 2024, and with operating expenses around where they are right now, that would get us to positive cash flow. Long-term, as we scale, we'll be looking for growth margins that are significantly higher. The eighth and the quarter percent price increased, coupled with our further improvements in the second quarter, essentially doubles the 10 percent growth we reported in the first quarter, and we've further cost improvements identified.

Speaker Change: Our models show that if we continue this gross margin improvement on a similar level of revenues and make a few other minor adjustments, we'll generate positive cash flow.

Desmond Wheatley: And with operating expenses around where they are right now, that would get us to positive cash flow. Long term, as we scale, we'll be looking for gross margins that are significantly higher. The 8.25% price increase coupled with our further improvements in the second quarter essentially doubles the 10% gross margin we reported in the first quarter, and we have further cost improvements identified.

Speaker Change: Exiting the year with a gross margin that's better than double where it was at the end of Q1 is our goal for 2024. And with operating expenses around where they are right now, that would get us to positive cash flow.

Speaker Change: Long term, as we scale, we'll be looking for gross margins that are significantly higher.

Speaker Change: The 8.25% price increase coupled with our further improvements in the second quarter essentially doubles the 10% gross we reported in the first quarter, and we have further cost improvements identified. So cash flow is very much on our visible horizon towards the end of 2024, and it's a major area of focus for us.

Desmond Wheatley: So, cash flow is very much on our visible horizon towards the end of 2024, and it's a major area of focus for us. As for sales growth, if you take a look at our quarterly filings over the last couple of years, you'll see that we reported quarter after quarter of eight-digit sales, even though we've not reported a repeat of some of the very large order sales we made in 2022. Clearly, not reporting these sorts of sales doesn't mean that we haven't been selling. Nor does it mean that we haven't been delivering record numbers of units to customers all over the United States and now internationally.

Desmond Wheatley: So, cash flow is very much on our visible horizon towards the end of 2024, and it's a major area of focus for us. As for sales growth, if you take a look at our quarterly filings over the last couple of years, you'll see that we've reported quarter after quarter of eight-digit sales, even though we haven't reported a repeat of some of the very large order sales we made in 2022. Clearly, not reporting these sorts of sales doesn't mean that we haven't been selling, nor does it mean that we haven't been delivering record numbers of units to customers all over the United States and now internationally.

Speaker Change: As for sales growth, if you take a look at our quarterly filings over the last couple of years, you'll see that we've reported quarter after quarter of eight-digit sales, even though we've not reported a repeat of some of the very large order sales we made in in 2022.

Speaker Change: Clearly not reporting these sorts of sales doesn't mean that we haven't been selling, nor does it mean that we haven't been delivering record numbers of units to customers all over the United States and now internationally.

Desmond Wheatley: In fact, the value of our purchase orders in the second quarter of 2024 is about 36 percent higher than they were in the second quarter of 2023.

Desmond Wheatley: In fact, the value of our purchase orders in the second quarter of 2024 is about 36% higher than they were in the second quarter of 2023. We continue to work on selling very large orders too, and I see no reason why we should not be successful in those efforts. So it's hard to pinpoint when because larger sales offers include more stakeholders and less certainty on timing. What we have seen and continue to see is lumpiness in our order cadence. However, our pipeline, which now stands at over $180 million, is the largest in our history.

Speaker Change: In fact, the value of our purchase orders in the second quarter of 2024 is about 36% higher than they were in the second quarter of 2023.

Desmond Wheatley: We continue to work on selling the very large orders too, and I see no reason why we should not be successful in those efforts. First. So, it's hard to pinpoint when because larger sales offer includes more stakeholders and less certainty on timing. What we have seen and continue to see lumpiness in our order cadence, our pipeline, which now stands at over $180 million, is the largest in our history. Aside from government business, we're targeting commercial enterprises such as amusement parks, corporate parks and campuses, sporting events, music and other entertainment values, and other facilities and corporate entities that accommodate tens of thousands of cars each day.

Speaker Change: We continue to work on selling the very large orders too, and I see no reason why we should not be successful in those efforts.

Speaker Change: It's hard to pinpoint when because larger sales offer includes more stakeholders and less certainty on timing.

Speaker Change: What we have seen and continue to see lumpiness in our order cadence, our pipeline, which now stands at over $180 million, is the largest in our history.

Desmond Wheatley: Aside from government business, we're targeting commercial enterprises such as amusement parks, corporate parks and campuses, sporting events, music and other entertainment venues, and other facilities and corporate entities that accommodate tens of thousands of cars each day.

Speaker Change: Aside from government business, we're targeting commercial enterprises such as amusement parks, corporate parks and campuses, sporting events, music and other entertainment values, and other facilities and corporate entities that accommodate tens of thousands of cars each day.

Desmond Wheatley: Beyond 2024, we believe that the EV standard, which we intend to re-brand to Beam Spot, is going to be a meaningful contributor to sales, cash flow, and profits as well. Our sales efforts targeting non-government commercial customers bore further fruit in the second quarter, with commercial enterprise sales accounting for about 30% of our revenues during that period, up from about 10% in the same period prior year. Interesting to note that our second quarter revenues included about $5 million less federal government contribution than in the second quarter of 2023. And yet, Beam Global 2.2 revenues were up from the first quarter.

Desmond Wheatley: Beyond 2024, we believe that the EV standard, which we intend to rebrand to BeamSpot, is going to be a meaningful contributor to sales, cash flow, and profits as well. Our sales efforts targeting non-government commercial customers bore further fruit in the second quarter, with commercial enterprise sales accounting for about 30% of our revenues during that period, up from about 10% in the same period last year. It is interesting to note that our second quarter revenues included about $5 million less federal government contribution than in the second quarter of 2023.

Speaker Change: Beyond 2024, we believe that the EV standard, which we intend to rebrand to Beamspot, is going to be a meaningful contributor to sales, cash flow, and profits as well.

Speaker Change: Our sales efforts targeting non-government commercial customers bore further fruit in the second quarter with commercial enterprise sales accounting for about 30% of our revenues during that period up from about 10% in the same period prior year.

Desmond Wheatley: And yet, Beam Global Q2 revenues were up from the first quarter. In other words, we were able to make up for some of the time shifts and lumpiness in federal order cadence caused by budget uncertainties and, no doubt, the upcoming federal election by adding more commercial sales. This is consistent with our strategy to target both commercial and government sales in both the United States and Europe and also to diversify revenue opportunities by adding geographic expansion but also product offering expansion, as we've done with batteries and the legacy products which Beam Europe creates.

Speaker Change: It's interesting to note that our second quarter revenues included about $5 million less federal government contribution than in the second quarter of 2023. And yet, Beam Global Q2 revenues were up from the first quarter.

Desmond Wheatley: In other words, we were able to make up for some of the timeships and lumpiness in federal ordertators caused by budget uncertainties and no doubt the upcoming federal election by adding more commercial sales.

Speaker Change: In other words, we were able to make up for some of the time shifts and lumpiness in federal order cadence caused by budget uncertainties and no doubt the upcoming federal election by adding more commercial sales.

Desmond Wheatley: This is consistent with our strategy to target both commercial and government sales in both the United States and in Europe, and also to diversify revenue opportunities by adding geographic expansion, but also product offering expansion as we've done with batteries and the legacy products which Beam Europe creates. We'll have more new revenue opportunities as we add Beam Spot, formerly EV Standard, and a couple of other new products, which I hope to have out before the end of the year. Our strategy of adding distributors, resellers, and agents will, we believe, further enhance our sales efforts as we target EPCs and others involved in the deployment of grid-type EV charting with our rapidly deployed and highly scalable solutions.

Speaker Change: This is consistent with our strategy to target both commercial and government sales in both the United States and in Europe, and also to diversify revenue opportunities by adding geographic expansion, but also product offering expansion, as we've done with batteries and the legacy products which Beam Europe creates.

Desmond Wheatley: We'll have more new revenue opportunities as we add Beamspot, formerly EV Standard, and a couple of other new products, which I hope to have out before the end of the year. Our strategy of adding distributors, resellers, and agents will, we believe, further enhance our sales efforts as we target EPCs and others involved in the deployment of grid-type EV charting with our rapidly deployed and highly scalable solutions. We give them more ways to say yes to their customers while increasing our sales without increasing our overhead costs.

Speaker Change: We'll have more new revenue opportunities as we add Beamspot, formerly EVstandard, and a couple of other new products which I hope to have out before the end of the year.

Speaker Change: Our strategy of adding distributors, resellers, and agents will, we believe, further enhance our sales efforts as we target EPCs and others involved in the deployment of grid-type EV charting with our rapidly deployed and highly scalable solutions.

Desmond Wheatley: We give them more ways to say yes to their customers while increasing our sales without increasing our overhead costs.

Speaker Change: We give them more ways to say yes to their customers while increasing our sales without increasing our overhead costs.

Desmond Wheatley: We've made fantastic progress on the integration of our European acquisition, and we want our first million-dollar European order for EV arc less than five months after we close on that transaction, a milestone that took over five years to achieve in the United States. The legacy business we acquired is also growing and assisting in our efforts to expand our clean technology sales in what is by far the largest market in the world for our products. But we haven't even begun to realize what I believe will be the tremendous growth in that market. Our European operations should contribute very favorably to our profitability for several reasons.

Desmond Wheatley: We've made fantastic progress on the integration of our European acquisition, and we want our first million-dollar European order for EV ARK less than five months after we close on that transaction, a milestone that took over five years to achieve in the United States.

Speaker Change: We've made fantastic progress on the integration of our European acquisition and we won our first million dollar European order for EV ARK less than five months after we closed on that transaction. A milestone that took over five years to achieve in the United States.

Desmond Wheatley: The legacy business we acquired is also growing and assisting in our efforts to expand our clean technology sales in what is by far the largest market in the world for our products. But we haven't even begun to realize what I believe will be tremendous growth in that market. Our European operations should contribute very favorably to our profitability for several reasons. First, our European team is very good at what they do where the legacy business is concerned.

Speaker Change: The legacy business we acquired is also growing, and assisting in our efforts to expand our clean technology sales in what is by far the largest market in the world for our products.

Speaker Change: But we haven't even begun to realize what I believe will be the tremendous growth in that market.

Speaker Change: Our European operations should contribute very favorably to our profitability for several reasons.

Desmond Wheatley: First, our European team is very good at what they do where the legacy business is concerned. They run that business profitably prior to the acquisition. Second, we're able to produce EV arc systems much less expensively in Europe than we can in the United States. As we consolidate our financials, those superior growth margins will have a positive effect on our global financials. And there's another exciting impact. Beam Europe can produce certain components and sub-assemblies of EV arcs so inexpensively that it actually makes more sense for us to manufacture there and ship those pieces to the United States for final assembly, further reducing our direct costs and improving our growth profits.

Desmond Wheatley: They ran that business profitably prior to the acquisition. Second, we're able to produce EV arc systems much less expensively in Europe than we can in the United States. As we consolidate our finances, those superior gross margins will have a positive effect on our global finances. And there's another exciting impact.

Speaker Change: First, our European team is very good at what they do where the legacy business is concerned.

Speaker Change: They run that business profitably prior to the acquisition.

Speaker Change: Second, we're able to produce EV arc systems much less expensively in Europe than we can in the United States.

Speaker Change: As we consolidate our financials, those superior gross margins will have a positive effect on our global financials.

Desmond Wheatley: Beam Europe can produce certain components and sub-assemblies of EV arcs so inexpensively that it actually makes more sense for us to manufacture them there and ship those pieces to the United States for final assembly, further reducing our direct costs and improving our gross profit. For example, we can produce and ship EV arc baseplates from our European operations so much less expensively than it costs us to make them in the US that we estimate that one component alone will contribute 2 to 3% of gross profit improvement.

Speaker Change: And there's another exciting impact. Beam Europe can produce certain components and subassemblies of EV arcs so inexpensively that it actually makes more sense for us to manufacture there and ship those pieces to the United States for final assembly, further reducing our direct costs and improving our gross profits.

Desmond Wheatley: First, for example, we can produce and ship EV arc-based plates from our European operations, so almost less expensive than it costs us to make them in the US. That one component alone will contribute 2 to 3% in growth profit improvement. So our European actors is not only providing us access to the largest market in the world for our products with a reduced cost basis, but it's also contributing to cost reductions in our United States operations.

Speaker Change: For example, we can produce and ship EV arc base plates from our European operations so much less expensively than it costs us to make them in the US that we estimate that one component alone will contribute 2 to 3% in gross profit improvement.

Desmond Wheatley: So our European partners are not only providing us access to the largest market in the world for our products at a reduced cost basis, but they're also contributing to cost reductions in our United States operation. Remember that we paid cash and stock for less than the independently appraised value of the real estate and other hard assets that we acquired through that transaction.

Speaker Change: So, our European acquisition is not only providing us access to the largest market in the world for our products with a reduced cost basis, but it's also contributing to cost reductions in our United States operations.

Desmond Wheatley: Remember that we paid cash and stock value less than the independently appraised value of the real estate and other hard assets that we acquired through that transaction. At the same time, I believe that the sellers, now our very talented European leadership, will do fantastically well as a result of becoming part of Beam Global because of the tremendous growth that we see ahead of us. We have more cash in the bank at the end of the second quarter than we did at the end of the first quarter, and when considering the other components of our working capital balance, I'm confident that we have sufficient cash to provide for what should continue to be our reducing burn as a result of the continually increasing growth profit contributions described above.

Speaker Change: Remember that we paid cash and stock values less than the independently appraised value of the real estate and other hard assets that we acquired through that transaction.

Desmond Wheatley: At the same time, I believe that the Sellers, now our very talented European leadership, will do fantastically well as a result of becoming part of Beam Global because of the tremendous growth that we see ahead of us. We will have more cash in the bank at the end of the second quarter than we did at the end of the first quarter. And when considering the other components of our working capital balance, I'm confident that we have sufficient cash to provide for what should continue to be our reducing burn as a result of the continuingly increasing gross profit contributions described above. Our ending cash balance was $8.7 million, up from $5 million at the end of the first quarter.

Speaker Change: At the same time, I believe that the Sellers, now our very talented European leadership, will do fantastically well as a result of becoming part of BEAM Global because of the tremendous growth that we see ahead of us.

Speaker Change: We have more cash in the bank at the end of the second quarter than we did at the end of the first quarter. And when considering the other components of our working capital balance, I'm confident that we have sufficient cash to provide for what should continue to be our reducing burn as a result of the continuingly increasing gross profit contributions described above.

Desmond Wheatley: Our ending cash balance was $8.7 million, up from $5 million at the end of the first quarter. This improvement in our cash position is largely due to payments coming in on some of our larger accounts. It's also consistent with something that I've often mentioned during these costs, which is that our working capital balance is actually the most important metric when considering Beam Global's cash health because of our ability to convert inventory, work and progress at AR into cash in a relatively short period of time. But of course, the most interesting indicator here is that as our growth profits improve, the ratio of cash going out to cash coming in improves.

Operator: or Operating Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Speaker Change: Our ending cash balance was $8.7 million up from $5 million at the end of the first quarter.

Desmond Wheatley: This improvement in our cash position is largely due to payments coming in on some of our larger accounts. But it's also consistent with something that I've often mentioned during these calls, which is that our work and capital balance is actually the most important metric when considering Beam Global's cash health because of our ability to convert inventory, work in progress, and AR into cash in a relatively short period of time. But of course, the most interesting indicator here is that as our gross profits improve, the ratio of cash going out to cash coming in also improves.

Speaker Change: This improvement in our cash position is largely due to payments coming in on some of our larger accounts.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-ten phone. To withdraw your question, please press star then two.

Speaker Change: It's also consistent with something that I've often mentioned during these calls, which is that our work and capital balance is actually the most important metric when considering being Global's cash elf, because of our ability to convert inventory, work in progress, and AR into cash in a relatively short period of time.

Operator: Please note this event is being recorded.

Lisa Potok: I would now like to turn the conference over to Lisa Potok Chief Financial Officer. Please go ahead.

Speaker Change: But of course, the most interesting indicator here is that as our gross profits improve, the ratio of cash going out to cash coming in also improves.

Desmond Wheatley: We'll continue to see a lot of variation in cash on the balance sheet because so much of it's driven by the types of orders we receive and where we are in the process of executing on those orders. Clearly, when we get a large order and we have to produce materials and components to execute on that order, we should see a reduction in cash, with a correlate to that being that when those large orders are delivered, we get paid and our cash goes back up. In the event that we get a very large order and we are always aiming for those, we have our $100 million credit line, which is still untapped.

Desmond Wheatley: We'll continue to see a lot of variation in cash on the balance sheet because so much of it is driven by the types of orders we receive and where we are in the process of executing on those orders.

Lisa Potok: Hi, good afternoon and thank you for participating in Beam Global's second quarter of 24 Operating Results Conference Call. We appreciate you joining us today to hear an update on our business. Joining me is Desmond Wheatley, our president, CEO and chairman of Beam. Desmond will be providing an update on recent activities that Beam followed by a question and answer section. But first, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance and operational results.

Speaker Change: We'll continue to see a lot of variation in cash on the balance sheet because so much of it is driven by the types of orders we receive and where we are in the process of executing on those orders.

Desmond Wheatley: Clearly, when we get a large order and we have to produce materials and components to execute on that order, we should see a reduction in cash with a corollary to that being that when those larger orders are delivered, we get paid, and our cash goes back up. In the event that we get a very large order, and we are always aiming for those, we have our $100 million credit line, which is still on tap.

Speaker Change: Clearly, when we get a large order and we have to produce materials and components to execute on that order, we should see a reduction in cash with a corollary to that being that when those larger orders are delivered, we get paid and our cash goes back up.

Lisa Potok: Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's most recently filed form 10K and other periodic reports filed with the SEC.

Speaker Change: In the event that we get a very large order, and we are always aiming for those, we have our $100 million credit line, which is still untapped.

Desmond Wheatley: But, with all other things being equal, our improving growth profits are reducing the burden on our cash. As I said, working capital is probably the most informative metric on our balance sheet. But when looking at working capital, you also need to be considerate of non-cash impacts. Our Q2 working capital ending balance includes over $5 million of non-cash items related to the contingent consideration for the Amiga acquisition or no. Excluding that non-cash impact, you can see that our working capital balance was just $600,000 less in the second quarter than it was in the first quarter.

Desmond Wheatley: But with all other things being equal, our improving gross profits are reducing the burden on our cash. As I said, working capital is probably the most informative metric on our balance sheet. But when looking at working capital, you also need to be considerate of non-cash impact. For example, our Q2 working capital lending balance includes over $5 million of non-cash items related to the contingent consideration for the Amiga acquisition earners.

Speaker Change: But with all other things being equal, our improving gross profits are reducing the burden on our cash.

Speaker Change: As I said, working capital is probably the most informative metric on our balance sheet. But when looking at working capital, you also need to be considerate of non-cash impacts.

Speaker Change: Our Q2 working capital ending balance includes over $5 million of non-cash items related to the contingent consideration for the Amiga acquisition earn out.

Lisa Potok: The content of this call contains time-sensitive information that is accurate only as of today, August 13, 2024, except as required by law, Beam describes any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

Desmond Wheatley: Excluding that non-cash impact, you can see that our working capital balance was just $600,000 less in the second quarter than it was in the first quarter. This is another very strong indicator that we're taking the right steps to move us toward positive cash flow. We've made tremendous progress on the development of our curbside charging product, the streetlight replacing EV standard or laterally beam spots as it's been revamped. We have almost all the components in-house now for this new product, and our team in Chicago has completed the assembly of the electronics and batteries in the column of the beam spot.

Speaker Change: Excluding that non-cash impact, you can see that our working capital balance was just $600,000 less in the second quarter than it was in the first quarter. This is another very strong indicator that we're taking the right steps to move us towards positive cash flow.

Desmond Wheatley: This is another very strong indicator that we're taking the right steps to move us towards positive cash flow.

Desmond Wheatley: We make tremendous progress on the development of our curbside charging product, the street light replacing EV standard or laterally beam spots as it's been rebanded. We've almost all the components in-house now for this new product, and our team in Chicago has completed the assembly of the electronics and batteries in the column of the beam spot. We're preparing the location in San Diego where the first system will be installed, and I expect that we will stand up the first four two types in the next couple of months, at which time we will start to aggressively market this product globally.

Lisa Potok: Next, I would like to provide an overview of our financial results for Beam's second quarter of 24. Our second quarter revenues are 14.8 million. It's increasing 2% over Q1 of 24. 31% of our revenue and second quarter was derived from commercial customers. For the six months ended June 30th of 24, our revenues were 29.4 million. We have a backlog of 11 million, and our pipeline of prospective customers has increased to over 183 million.

Speaker Change: We've made tremendous progress on the development of our curbside charging product, the streetlight replacing EV standard or laterally beam spots as it's been rebranded.

Speaker Change: We've almost all the components in-house now for this new product, and our team in Chicago has completed the assembly of the electronics and batteries in the column of the beam spot.

Desmond Wheatley: We're preparing the location in San Diego where the first system will be installed, and I expect that we will stand up the first prototypes in the next couple of months, at which time we will start to aggressively market this product globally. We also intend to install a new...

Speaker Change: We're preparing the location in San Diego where the first system will be installed and I expect that we will stand up the first prototypes in the next couple of months at which time we will start to aggressively market this product globally. We also intend to install in Europe.

Desmond Wheatley: We also intend to install in Europe. I believe it has the potential to be our biggest seller.

Desmond Wheatley: I believe it has the potential to be our biggest seller. As a result of our excellent recent acquisitions, we're now also looking at some of the largest opportunities we've ever encountered, and those are not yet closed. I personally believe that we will win one or more of them.

Desmond Wheatley: As a result of our excellent recent acquisitions, we're now also looking at some of the largest opportunities we've ever confronted, and those are not yet closed. I personally believe that we will win one or more of them. We're also working on other new product offerings, which, like all of our solutions, are in response to very real prospective customer requirements.

Speaker Change: I believe it has the potential to be our biggest seller.

Lisa Potok: Although we cannot be sure when or if those prospective orders will turn into actual sales. We generated a record gross margin for the second quarter in a row with a gross margin of 16%. The margin improved 6 percentage points compared to Q1 of 24. Our gross profits included a 300,000 for non-cash depreciation and intangible amortization which negatively impacts our profits. Net of these non-cash items, our gross margin was 18%. For the six months ended June 30th of 24, our gross profit was 3.8 million or 13% of sales.

Speaker Change: As a result of our excellent recent acquisitions, we're now also looking at some of the largest opportunities we've ever confronted. And though those are not yet closed, I personally believe that we will win one or more of them.

Desmond Wheatley: We're also working on other new product offerings, which, like all of our solutions, are in response to very real prospective customer requirements. I look forward to introducing one or more of these to you in the coming quarter. Shifting gears slightly, there's been a good deal of largely unfounded negativity and uncertainty surrounding EVs. The EV charting industry has suffered as a result. There have been one or two bankruptcies and some very public retreats from the deployment of charting infrastructure.

Speaker Change: We're also working on other new product offerings, which, like all of our solutions, are in response to very real prospective customer requirements. I look forward to introducing one or more of these in the coming quarters.

Desmond Wheatley: I look forward to introducing one or more of these to you in the common quarters.

Desmond Wheatley: Truth and truth slightly, there's been a good deal of largely unfounded negativity and uncertainty surrounding EVs this year. The EV charting industry has suffered as a result. There have been one or two bankruptcies and some very publicly retreats from the deployment of charting infrastructure. We've seen some debate at the regulatory level in an election year, and we've seen the media run with stories about the heat, the cold, and the performance of EV charting stations. I know that I'm not alone in believing that none of this uncertainty or negativity will impact the long-term inevitability of the electrification of transportation, and the solutions like ours are going to continue to attract capital and generate great returns from investors over time and as the business materials and scales.

Speaker Change: Shifting gears slightly, there's been a good deal of largely unfounded negativity and uncertainty surrounding EVs this year.

Speaker Change: The EV charting industry has suffered as a result. There have been one or two bankruptcies and some very public retreats from the deployment of charting infrastructure.

Desmond Wheatley: We've seen some debate at the regulatory level in an election year, and we've seen the media run stories about the heat, the cold, and the performance of EV charting. I know that I'm not alone in believing that none of this uncertainty or negativity will impact the long-term inevitability of the electrification of transportation and that solutions like ours are going to continue to attract capital and generate great returns for investors over time and as the business matures and scales.

Lisa Potok: Our six month gross profits included a negative impact of 0.6 million for non-cash depreciation and intangible amortization. Our six month gross profits net of these non-cash items was 15%. The improvement in their gross margin is primarily because we are able to recognize the engineering design changes to our EV arc that resulted in cost reductions to our bill materials as well as labor efficient. Services. Additionally, there were reductions in material costs, as well as operational improvements and positive margins generated from the acquisition of Amiga. Our engineering and operations team continue to identify further cost reductions and efficiencies which, along with the support from our Serbian facilities, we believe will improve our growth margins in future quarters.

Speaker Change: We've seen some debate at the regulatory level in an election year, and we've seen the media run with stories about the heat, the cold, and the performance of EV charting stations.

Speaker Change: I know that I'm not alone in believing that none of this uncertainty or negativity will impact the long-term inevitability of the electrification of transportation, and that solutions like ours are going to continue to attract capital and generate great returns for investors over time and as the business matures and scales.

Desmond Wheatley: There's a strong case to be made that the automakers will find the way to manufacture EVs more profitably than the current internal combustion engine models. It's also a fact that approximately half of traditional car company employees are paid to make engines in gearboxes. Electric vehicles have no engines or gearboxes. The harsh reality is that car companies will be able to operate with half as many employees in the near future, making cars, which are like computers on wheels. Just like computers, those cars will get cheaper by leaps and bounds while offering more and more functionality to the consumer.

Desmond Wheatley: There's a strong case to be made that the automakers will find a way to manufacture EVs more profitably than their current internal combustion engine. It's also a fact that approximately half of traditional car company employees are paid to make engines and gearboxes, while electric vehicles have no engines or gearboxes.

Speaker Change: There's a strong case to be made that the automakers will find a way to manufacture EVs more profitably than their current internal combustion engine models.

Speaker Change: It's also a fact that approximately half of traditional car company employees are paid to make engines and gearboxes.

Desmond Wheatley: The harsh reality is that car companies will be able to operate with half as many employees in the near future, making cars that are like computers on wheels. Just like computers, those cars will get cheaper by leaps and bounds while offering more and more functionality to the consumer. No car company will cling to the old technology in the face of these radical new competitive advantages.

Speaker Change: Electric vehicles have no engines or gearboxes.

Speaker Change: The harsh reality is that car companies will be able to operate with half as many employees in the near future making cars which are like computers on wheels. Just like computers, those cars will get cheaper by leaps and bounds while offering more and more functionality to the consumer.

Lisa Potok: Then, for our operating expenses. For Q224 with 7.1 million compared to 4.5 million in Q1 of 24, the 2.6 million increase is primarily related to a 1.8 million expense related to the change in the fair value of the contingent consideration which is non-cash for the Amiga acquisition. We also had 300,000 for operating expenses in the quarter for Beam Europe, and then we had 600,000 for commission expenses. Commissions are paid when receivables are collected.

Desmond Wheatley: No car company will cling to the old technology in the face of these radical new competitive advantages. Just note Volkswagen's recent $5 billion investment in Rivian. Government tailwinds like Europe's banning of diesel and gasoline vehicles in 2035. By the way, California and many other U-states have the same or similar bands. And all the other regulations, which are making polluting harder and more expensive, will continue to play a role. But actually, consumer choice and profitability of the car companies will be the biggest drivers of this revolution. Far from being impossible to make profitably, EVs will become far more profitable for OEMs and gas and diesel vehicles.

Speaker Change: No car company will cling to the old technology in the face of these radical new competitive advantages.

Desmond Wheatley: Just note Volkswagen's recent $5 billion investment in Rivian, and government tailwinds like Europe's banning of diesel and gasoline vehicles in 2035. By the way, California and many other states have the same or similar bans.

Speaker Change: Just note Volkswagen's recent five billion dollar investment in Rivian.

Speaker Change: Government tailwinds like Europe's banning of diesel and gasoline vehicles in 2035. By the way, California and many other states have the same or similar bans. And all the other regulations which are making polluting harder and more expensive will continue to play a role, but actually consumer choice and profitability at the car companies will be the biggest drivers of this revolution.

Desmond Wheatley: And all the other regulations which are making polluting harder and more expensive will continue to play a role. But actually, consumer choice and profitability at the car companies will be the biggest drivers of this revolution. Far from being impossible to make profitably, EVs will become far more profitable for OEMs than gas and diesel vehicles. It's true that a lack of charging infrastructure and lack of capacity on the utility grids, along with the vulnerability created by blackouts, will continue to present major challenges to the broad electric vehicle ecosystem. So will the electric requirements of artificial intelligence, data centers, and the electrification of industry. But these are not challenges for Beam Global.

Lisa Potok: Our operating expenses for the 6 months in being Q224 was 11.7 million. These operating expenses included 1.5 million related to the change in the Amiga acquisition which again is non-cash and 900,000 for the operating expenses of Beam Europe. The net loss was 4.9 million for the second quarter of 24. The second quarter net loss included non-cash expense items related to depreciation, intellectual property amortization, non-cash compensation, or allowance for bad debt, and the fair value of the contingent consideration expense of 2.8 million in 2024.

Speaker Change: Far from being impossible to make profitably, EVs will become far more profitable for OEMs than gas and diesel vehicles.

Desmond Wheatley: And it's true that a lack of charting in infrastructure and lack of capacity on the utility grids, along with the vulnerability created by blackouts, will continue to present major challenges to the broad electric vehicle ecosystem. So will the electric requirements of artificial intelligence, data centers, and the electrification of industry? But these are all challenges for Beam Global. These are exactly the sort of opportunities that we've developed this fantastic company to exploit. In fact, as it gets harder and harder to deploy traditional grid-tight EV charting infrastructure as the EV locations in grid-to-passes are used up, beam global products will become increasingly and more urgently required.

Speaker Change: And it's true that a lack of charting infrastructure and lack of capacity on the utility grids, along with the vulnerability created by blackouts, will continue to present major challenges to the broad electric vehicle ecosystem.

Speaker Change: So will the electric requirements of artificial intelligence, data centers, and the electrification of industry.

Desmond Wheatley: These are exactly the sort of opportunities that we've developed this fantastic company to exploit. In fact, as it gets harder and harder to deploy traditional grid-tied EV charging infrastructure, as the EV locations and grid capacity are used up, Beam Global's products will become increasingly and more urgently required. Just a quick point on the U.S. election and how it might affect electric vehicles. I've heard it said that if Trump returns to the presidency, we will see a reversal of the IRA funding and a generally negative environment for electric vehicles. I don't think this is true. More IRA funds are slated for Republican states than Democrats.

Speaker Change: But these are all challenges for being global.

Speaker Change: These are exactly the sort of opportunities that we've developed this fantastic company to exploit. In fact, as it gets harder and harder to deploy traditional grid-tied EV charging infrastructure, as the EV locations and grid capacity are used up, Beam Global's products will become increasingly and more urgently required.

Desmond Wheatley: Just a quick point on the U.S. election and how it works. I've heard it said that if Trump returns the presidency, we will see a reversal of the IRA funding and a generally negative environment for electric vehicles. I don't think this is true. More IRA funds are slated for Republican states than Democrats. Crack. Just last week, 18 members of the House of Republican Delegation sent a letter to Speaker of the House, Mike Johnson, to prioritize business and market certainty around the Installation Reduction Act. The group of Republican lawmakers wrote, prematurely repealing energy tax credits, particularly those which are used to justify investments that are already broke ground, would undermine private investments and stock development that's already undergoing.

Lisa Potok: Net loss excluding the non-cash items would have been 2.1 million or 14 cents per share for Q2 of 24. The net loss was 8 million for the 6 months in the June of 24. The net loss includes non-cash expense items of 3.5 million in 2024, and the net loss excluding those non-cash items was 4.4 million for the 6 months in the Q2 of 24. Our cash balance at Q2 of 24 was 8.7 million compared to 5 million at the end of Q1 of 24, and this is mainly related to the increased collections from our customers during the quarter.

Speaker Change: Just a quick point on the US election and how it might affect us. I've heard it said that if Trump returns to the presidency, we will see a reversal of the IRA funding and a generally negative environment for electric vehicles.

Speaker Change: I don't think this is true. More IRA funds are slated for Republican states than Democrat.

Desmond Wheatley: Just last week, 18 members of the House of Republican Delegation sent a letter to Speaker of the House, Mike Johnson, to prioritize business and market certainty around inflation reduction. The group of Republican lawmakers wrote, prematurely repealing energy tax credits, particularly those which are used to justify investments that are already breaking ground, would undermine private investments and stock development that's already underway. Full repeal would create a worst-case scenario where we'd have spent billions of taxpayer dollars and received nothing in return.

Speaker Change: Just last week, 18 members of the House Republican delegation sent a letter to Speaker of the House Mike Johnson to prioritize business and market certainty around the Inflation Reduction Act.

Speaker Change: The group of Republican lawmakers wrote, prematurely repealing energy tax credits, particularly those which are used to justify investments that are already broke ground, would undermine private investments and stop development that's already undergoing.

Desmond Wheatley: A full repeal would create a worst-case scenario where we would have spent billions of taxpayer dollars and received nothing in return. And again, that's from 18 members of the House of Republican Delegation to speak of Mike Johnson. By the way, I've met with 14 of those Republicans during our trips to Washington, DC, and we find them fully appreciate the value proposition of our products. And we're confident that a Republican-led Congress will not turn its back on energy investments made in IRA, despite what you mean here on television. EVs are inevitable for reasons which go way beyond the scope of the president, whoever that turns out to be.

Lisa Potok: At the end of December 2023, we had cash of 10.4 million. The cash decrease between Q4 of 23 and Q2 of 24 was primarily due to the cash payments for the acquisition of Amiga of 2.7 million that we did in early Q1 of 24. Our net cash used for operating activities for the period ending Q2 of 24 was 100,000. We continue to be debt-free other than some small auto leases and have 100 million line of credit that's readily available.

Speaker Change: A full repeal would create a worst case scenario where we'd have spent billions of taxpayer dollars and received nothing in return. And again, that's from 18 members of the House Republican delegation to Speaker Mike Johnson.

Desmond Wheatley: And again, that's from 18 members of the House Republican delegation to Speaker Mike Johnson. By the way, I've met with 14 of those Republicans during our trips to Washington, D.C., and we find them to fully appreciate the value proposition of our products, and we're confident that a Republican-led Congress will not turn its back on energy investments made in the IRA despite what you may hear on television. EVs are inevitable for reasons which go way beyond the scope of the President, whoever that turns out to be. Energy security and made in America products like ours are popular on both sides of the aisle. I know because I often meet with more Republican members of government than Democratic ones and always get a very positive reception.

Speaker Change: By the way, I've met with 14 of those Republicans during our trips to Washington, D.C., and we find them fully appreciate the value proposition of our products, and we're confident that a Republican-led Congress will not turn its back on energy investments made in the IRA despite what you may hear on television.

Speaker Change: EVs are inevitable for reasons which go way beyond the scope of the President, whoever that turns out to be.

Desmond Wheatley: Energy security and made in America products like ours are popular on both sides of the aisle. I know because I often meet with more Republican members of government than Democrat and always get a very positive reception.

Speaker Change: Energy security and made in America products like ours are popular on both sides of the aisle. I know because I often meet with more Republican members of government than Democrat and always get a very positive reception.

Lisa Potok: Our working capital of 16 million decreased 7.8 million from Q4 of 23 to Q2 of 24, mainly due to the accrual of the non-cash consideration for the Amiga acquisition of 5.4 million. This moved to current liabilities as of Q2 of 24 from non-current liabilities at Q4 of 23. This contingent consideration is a non-cash urn out based on revenue targets payable with shares of the company's common stock. Additionally, the decrease was due to the 2.7 million that I've mentioned previously for the cash payment for the Amiga acquisition in early Q1 24, which was in current liabilities at the end of Q4 of 23. Our working capital, net of non-cash items, was 21.4 million at the end of Q2 of 24.

Desmond Wheatley: In summary, we're continuing to sell great products to a market that needs them. We're continuing to improve our growth profits. We had cash flow firmly in our sights. We're expanding our product offerings, our geographic reach, and our selling resources. And we have sufficient cash and other tools to continue executing on this plan without going to the markets to do a raise.

Desmond Wheatley: In summary, we're continuing to sell great products to a market that needs them. We're continuing to improve our gross profits. We have cash flow firmly in our sites.

Speaker Change: In summary, we're continuing to sell great products to a market that needs them. We're continuing to improve our gross profits.

Desmond Wheatley: We're expanding our product offerings, our geographic reach, and our selling resources. And we have sufficient cash and other tools to continue executing on this plan without going to the markets to raise a round. 2024, with its elections and wars and other tensions and uncertainties, is going to be a difficult year in one way or another for most companies. But Beam Global is taking the necessary steps to get stronger and better and to continue on our trajectory to become a highly profitable, important, and sustainable global provider of the sorts of products and services that will provide an essential role in all of our futures. Microcaps are trading at 23-year lows.

Speaker Change: We have cash flow firmly in our sights.

Speaker Change: We're expanding our product offerings, our geographic reach, and our selling resources. And we have sufficient cash and other tools to continue executing on this plan without going to the markets to do a raise.

Desmond Wheatley: 2024, with its elections and wars and other tensions and uncertainties, is going to be a difficult year and one way or another for most companies. But Beam Global is taking the necessary steps to get stronger and better and to continue on our trajectory to become a highly profitable, important, and sustainable global provider of the sorts of products and services that will provide an essential role in all of our futures.

Speaker Change: 2024 with its elections and wars and other tensions and uncertainties is going to be a difficult year in one way or another for most companies.

Speaker Change: But Beam Global is taking the necessary steps to get stronger and better and to continue on our trajectory to become a highly profitable, important and sustainable global provider of the sorts of products and services that will provide an essential role in all of our futures.

Desmond Wheatley: Growth stocks, particularly in the EV and clean technology sectors, have been especially hard hit. However, the inevitability of these industries is no longer in question. We expect that quality companies with quality products and good financial discipline will be rewarded when the cycle turns, as they have always been in the past. I believe that Beam Global is just that sort of company, and I'm proud to be part of it. Thank you for your continued support.

Desmond Wheatley: Microcaps are creating a 23-year loss. Growth stocks, particularly in the EV and clean technology sectors, have been especially hard hit. However, the inevitable inevitability of these industries is no longer in question. We expect that quality companies with quality products and good financial discipline will re-reward between the cycle turns, as they always have in the past. I believe that Beam Global is just that sort of company, and I'm proud to be part of it. Thank you for your continued support.

Speaker Change: Microcaps are trading at 23-year lows. Growth stocks, particularly in the EV and clean technology sectors, have been especially hard hit. However, the inevitability of these industries is no longer in question.

Desmond Wheatley: I will now turn the call over to Desmond to provide a business update. Thank you, Lisa, and thank you to all of the rest of you for joining this call. Q2 has been another very busy quarter for Beam Global with a whole series of new milestones and records. Since our last earnings call, I've personally spent almost half of my time traveling and most of that time in Europe, although I did have a very eventful couple of weeks in Washington, DC, meeting with leaders on the hill.

Speaker Change: We expect that quality companies with quality products and good financial discipline will be rewarded when the cycle turns as they always have in the past.

Speaker Change: I believe that being global is just that sort of company and I'm proud to be part of it.

Desmond Wheatley: Our best days are ahead of us, and I'll now return the call to Lisa and the operator to take your questions. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone.

Desmond Wheatley: Our best days are ahead of us.

Operator: And I'll now return the call to Lisa and the operator to take your questions.

Speaker Change: Thank you for your continued support. Our best days are ahead of us.

Speaker Change: And I'll now return the call to Lisa and the operator to take your questions.

Operator: We will now begin the question and answer session. To ask a question, you may pass star, then one on your touch and phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two.

Operator: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. The first question comes from Sameer Joshi from H.C. Wainwright. Please go ahead. Hi Sameer, how are you? Hey, good, good. How are you?

Lisa Potok: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Desmond Wheatley: My European travel was largely about meeting new customers and investors, but also very gratifyingly, visiting locations where the first EV arcs produced by Beam Europe have been deployed. Just to give you an idea of the scope of our new reach during my latest trip, from which I just returned two weeks ago, I visited Washington, DC, London, Belgrade, Budapest, Vienna, Larnac and Nicosia on Cyprus, and Valletta and Gosa on Malta. I wasn't in any of those locations for fun, although I did have a fantastic time telling the Beam story and promoting our products and our stock to leaders in government industry, the military, and the investment community.

Lisa Potok: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

Samir Joshi: The first question comes from Samir Joshi from H.C. Wainwright. Please go ahead.

Sameer Joshi: Thanks for taking my questions. Just an interesting development with the British Ministry of Defence; can you share what the possible scope and scale of this contribution from this source will be in 2025? Sorry Sameer, can you run that one by me again?

Speaker Change: The first question comes from Samir Joshi from HC Wainwright. Please go ahead.

Samir Joshi: Hi, Samir, how are you? He's good. How are you? Thanks a lot for my questions.

Samir Joshi: Hi, Samir. How are you? Hey, good, good. How are you? Thanks for taking my questions.

Desmond Wheatley: Just the interesting development, the British Ministry of Defence. Can you share what is the possible, like the scope and scale of this, say, contribution from this source in 2025?

Speaker Change: Just an interesting development with the British Ministry of Defense. Can you share what is the possible, like the scope and scale of this, say, contribution from this source in 2025?

Desmond Wheatley: Sorry, Samir, can you run that one by me again? I missed. I broke up a little bit. Oh, sorry, can you hear me? Yes.

Sameer Joshi: I missed that; it broke up a little bit. Oh, sorry. Can you hear me?

Desmond Wheatley: As diverse as that list of locations may sound, what's fascinating is that they all have in common, more or less, the same challenges and requirements as we've observed, and for which we've designed a portfolio of fantastic products here in the United States. The only EV charging faster than traditional methods can provide it. They only to save money on construction and utility bills. They all have challenges with lack of capacity on the grid, and they're all very worried about what's going to happen to transportation, communications, and industry during future potentially very prolonged blackouts.

Speaker Change: Sorry, can you run that one by me again? I missed that, it broke up a little bit.

Desmond Wheatley: Yeah, the British Army, but they knew all those in 2025.

Operator: Yes. Yeah, the British Army. Oh, yeah, all those in 2025. I hate to guess at what any of our customers are going to do in the future. Clearly, as I said in my comments, they have the same challenges and requirements that the US military has. The British government has a similar mandate for the electrification of its entire White Fleet by 2027. White Fleet, meaning non-tactical vehicles; just on Cyprus alone, there are 650 fleet vehicles there, all of which will have to be electrified.

Speaker Change: Oh, sorry, can you hear me?

Speaker Change: Yes.

Speaker Change: Yeah, the British Army potential orders in 2025.

Desmond Wheatley: Look, I hate to guess that any of our customers is going to do in the future. Clearly, they, as I said in my comments, they have the same challenges and requirements that the US military has. The British government has a similar mandate for the electrification of its entire white fleet by 2027, white fleet meaning non-tactical vehicles. Just on Cypress alone, there are 650 fleet vehicles. They are all of which we will have to electrify. And that's going to be the case across British government, military, and everybody else. So look, they're going to need an awful lot of EV charging.

Speaker Change: Look, I hate to guess at what any of our customers is gonna do in the future. Clearly they, as I said in my comments, they have the same challenges and requirements that the...

Speaker Change: that the US military has, the British government has a similar mandate for the electrification of its entire White Fleet by 2027.

Desmond Wheatley: Beam Global's products solve for these challenges, and know that we manufacture in the United States and in Europe, we're servicing the largest addressable markets in the world. In the time since I last spoke to you, we've delivered products in the United States to California, Tennessee, Kentucky, Indiana, Maryland, Virginia, Pennsylvania, Puerto Rico, Texas, Ohio, Utah, Hawaii, New York, North Carolina, Minnesota, Wisconsin, Arizona, Colorado, New Mexico, Illinois, Iowa, and Nevada. And in Europe, we ship to Serbia, Slovenia, Croatia, Greece, Romania, Cyprus, Montenegro, and Bosnia.

Speaker Change: White Fleet meaning non-tactical vehicles.

Speaker Change: Just on Cyprus alone there are 650 fleet vehicles there, all of which will have to electrify.

Desmond Wheatley: And that's going to be the case across the British government, the military, and everybody else. So look, they're going to need an awful lot of EV charging. The British don't have as many overseas bases or the scale of the US, by any means, but they have a lot of them.

Speaker Change: and that's going to be the case across British government, military, and everybody else. So, look, they're going to need an awful lot of EV charging. The British don't have as many overseas bases or the scale of the U.S. have by any means, but they have a lot of them, and then they also have a lot of requirements on the mainland.

Desmond Wheatley: The British doesn't, they don't have as many overseas bases or the scale of the US have by any means, but they have a lot of them. And then they also have a lot of requirements on the mainland, and our products are very well suited to solving their problems. So we did an exemplary job. I'm really proud of the team that did a fantastic job of both manufacturing, shipping, and delivering in that new market. So you can think of that from a logistics point of view for us. We manufacture those products in our new European facilities.

Desmond Wheatley: And then they also have a lot of requirements on the mainland, and our products are very well suited to solving their problems. So we did an exemplary job. I'm really proud of the team that did a fantastic job of both manufacturing, shipping, and delivering in that new market. You can think of that from a logistics point of view for us. We manufacture those products in our new European facilities. And then we shipped them overland and across the Mediterranean Sea to an island in the middle of the Mediterranean Sea. And then we deployed them successfully on four different military bases in Cyprus without incident.

Speaker Change: and our products are very well suited to solving their problems.

Desmond Wheatley: Over half of our new orders in the second quarter came from brand new customers, expanding our ever-growing customer base. They included two major new California public transportation providers, a global supplier of advanced mobility products and systems, the Sacramento Municipal Utility District, or SMUD, the US Federal Railroad Administration, and also importantly, a leader in U.S, data centers who boss our products primarily for energy security and to relieve their lack of capacity on the grid problem, which is an increasingly important area of business for us.

Speaker Change: So we did an exemplary job. I'm really proud of the team that did a fantastic job of both manufacturing, shipping and delivering in that new market. You can think of that from a logistics point of view for us. We manufacture those products in our new European facilities and then we ship them overland and across the Mediterranean Sea to an island in the middle of the Mediterranean Sea. And then we deploy them successfully on four different military bases in Cyprus without incident.

Desmond Wheatley: And then we ship them overland and across the Mediterranean Sea to an island in the middle of the Mediterranean Sea. And then we deploy them successfully on four different military bases in Cyprus without incident. And they're operating perfectly right now. So I'm very proud of all that way that went. That will give that customer indication of the value of these products, the ease of deployment, and the security of the electricity. Don't forget particularly an overseas bases. You're often relying on the locals for electricity, which is not necessarily the best thing from a strategic or tactical point of view.

Desmond Wheatley: And they're up and operating perfectly right now, so I'm very proud of the way that went. That will give that customer an indication of the value of these products, the ease of deployment, and the security of the electricity. Don't forget, particularly on overseas bases, you're often relying on the locals for electricity, which is not necessarily the best thing from a strategic or tactical point of view.

Speaker Change: They're up and operating perfectly right now. So I'm very proud of the way that went. That will give that customer an indication of the value of these products, their ease of deployment, and the security of the electricity. Don't forget, particularly on overseas bases, you're often relying on the locals.

Desmond Wheatley: One of the new customers we're most excited about is the British Ministry of Defence. Not surprisingly, they face the same challenges and opportunities experienced by our largest customer of the United States military. Earlier this year, we were awarded a contract by Crown Commercial Services, which is very similar to the General Services Administration contract we have with the US Federal Government in that allows the United Kingdom's government to buy our products without having to go through any further competitive process.

Desmond Wheatley: So we're solving an awful lot of problems with them. And then lastly, I'll tell you this, EV charging is almost a boring aspect of this. What I'm really interested in is the other power, the e-power panel, the auxiliary power panel we have on these things and their ability to run other systems, stuff I can't even go into detail on, but their ability to do a whole lot else with this dispatchable electricity in these types of environments. So, kind of a long answer to tell you. I'm very bullish about our prospects for them, but I'm not going to No, no, this was a good color.

Desmond Wheatley: So we're solving an awful lot of problems with them. And then last they'll tell you this: they're, they're, they're, they're, the EV charging is almost a boring aspect to this.

Speaker Change: for electricity, which is not necessarily the best thing from a strategic or tactical point of view. So we're solving an awful lot of problems with them. And then lastly, I'll tell you this, they view the EV charting as almost a boring aspect of this. What they're really interested in is the other power, the e-power panel, the auxiliary power panel we have on these things, and their ability to run other systems, stuff I can't even go into detail on, but their ability to do a whole lot else with this dispatchable electricity in these types of environments.

Desmond Wheatley: What they're really interested in is the other power, you know, the E power panel, the auxiliary power panel we have on these things and their ability to run other systems. So I can't even go into detail on, but their ability to do a whole else with this dispatchable electricity in these types of environments. So, kind of a long answer to tell you I'm very bullish about our prospects for them, but I'm not going to put a number on it.

Desmond Wheatley: The British Army immediately made use of that contract and purchased ten EVR systems to be deployed on the island of Cyprus at four separate British sovereign military bases. Those EVR systems were shipped from our Beam Europe facilities and the deployments were completely just last week. You may have seen the press release this morning or seen some of the other media coverage on this promoted by the British Army. I visited those bases during my trip to Cyprus and I'm very enthusiastic about the future opportunities to do a lot more with the UK.

Speaker Change: So, kind of a long answer to tell you I'm very bullish about our prospects for them, but I'm not going to put a number on it.

Desmond Wheatley: No, no, this is, this is good color. Thanks for that. In terms of the pipeline that you have, it's not grown nicely from, I think, 160 to 183.

Desmond Wheatley: Thanks for that. In terms of the pipeline that you have, it's grown nicely from, I think, 160 to 183. Can you provide some color on, like, is this mostly Amiga-related or Illinois-based or California-based orders? And also, is there, like, how do you track this?

Speaker Change: No, no, this was good color. Thanks for that, Desmond.

Speaker Change: In terms of the pipeline that you have, it's grown nicely from, I think, 160 to 183.

Desmond Wheatley: Can you provide some color on, like, is this mostly Amiga related or Illinois based or California based orders? And also, is there like how you practice? What is your conversion rate from pipeline to orders? Yeah, and the last part of your question is obviously very relevant at the moment. So just to give you, you know, the majority of the pipeline in from a dollar's point of view is still coming from our sustainable EV charging products. We think that we're going to see a significant increase in that coming from Europe because, of course, we're just beginning to get those products out.

Speaker Change: Can you provide some color on, like, is this mostly Omega-related, or Illinois-based, or California-based orders?

Desmond Wheatley: Not only on Cyprus, but I hope, at other overseas bases as well. Everyone involved is excited that the Commander, British Forces Cyprus, who drives an electric Land Rover, now parks that vehicle on an EVR every morning when he arrives at work and all of his driving is now driving on sunshine powered by Beam Global products. We continue to do some really interesting stuff through our battery division. We were awarded a contract to do a custom industrial battery design for a major multinational conglomerate and we're hopeful that these initial design prototypes will lead to production level quantities delivered to them at a later date.

Speaker Change: and also is there like how do you practice what is your conversion rate from pipeline to ordering?

Desmond Wheatley: What is your conversion rate from pipeline to order? Yeah, and the last part of your question is obviously very relevant at the moment. So just to give you the answer, the majority of the pipeline from a dollar's point of view is still coming from our sustainable EV charting products. We think that we're going to see a significant increase in that coming from Europe because, of course, we're just beginning to get those products out. I'm going back over there in a couple of weeks to do some more selling, and we're really going to hit that hard.

Speaker Change: Yeah, and the last part of your question is obviously very relevant at the moment. So just to give you the answer, the majority of the pipeline from a dollars point of view is still coming from our sustainable EV charting products.

Speaker Change: We think that we're going to see a significant increase in that coming from Europe, because of course we're just beginning to get those products out. I'm going back over there in a couple of weeks to do some more selling, and we're really going to hit that hard. But we think we'll see a really big pickup from that. But the majority of the pipeline is still coming from our sustainable EV charging infrastructure products. And then, obviously, we're also getting contributions from our battery business in Chicago, and then increasingly from the legacy business. But what I'm really excited about is increasing the sustainable EV charging product business in Europe.

Desmond Wheatley: I'm going back over there in a couple of weeks to do some more selling. And we're really going to hit that hard, but we think we'll see, we'll see a really big pick up from that. But the majority of the pipeline is still coming from our sustainable EV charging infrastructure products. And then obviously we're also getting contributions from our battery business in Chicago and then increasingly from the both the legacy business. But what I'm really excited about is increasing the sustainable EV charging product business in Europe. But the last part of your question is obviously something which is, you know, on the point of my attention the whole time because we've got a combination of things going on.

Desmond Wheatley: Our specialized battery technology is being placed in wildfire detection systems now being placed in vulnerable wilderness areas and we're also developing quote site batteries for a major automotive OEMs motor sports division. In my opinion, the most interesting strategic maneuver for Beam Global since we last sought has been the signing of our first distribution agreement with Jesse Group, a Spanish logistics, engineering and technology firm which focuses on transportation, energy, aviation and military applications.

Desmond Wheatley: But we think we'll see a really big pickup from that, but the majority of the pipeline is still coming from our sustainable EV charting infrastructure products. And then obviously, we're also getting contributions from our battery business in Chicago and then increasingly from both the legacy business, but what I'm really excited about is increasing the sustainable EV charting product business in Europe. But the last part of your question is obviously something which has been at the center of my attention the whole time, because we've got a combination of things going on.

Desmond Wheatley: Jesse will distribute our products throughout Spain, Portugal and Spanish beating Caribbean. They will also provide after sale service, expanding not only our selling footprint, but also our ability to provide service to our customers in ever larger geographical environments. As we say in Scotland, the proof is in the pudding and the pudding in this case is that we're just received our first order from Jesse just one week after putting the distribution agreement in place.

Speaker Change: But the last part of your question is obviously something which is, you know, on the point of my attention the whole time, because we've got a combination of things going on. The good news is the pipeline is increasing. The bad news is that the backlog is not increasing with it, at least not at the pace that it should be.

Desmond Wheatley: The good news is that the pipeline is increasing. The bad news is that the backlog is not increasing with it, at least not at the pace that it should be. And so let's confront that head on. The simple fact of the matter is, as I mentioned in my comments, our Q2 revenues, we generated those revenues absent about 5 million in federal revenues that we'd had in the same quarter in the prior year.

Desmond Wheatley: Good news is the pipeline is increasing. The bad news is that the backlog is not increasing with it, at least not at the pace that it should be. And so let's confront that head-on. The simple fact of the matter is we, as I mentioned in my comments, we are two two revenues. We generate those revenues absent about five million in federal revenues that we've had in the same core in the prior year. And the simple fact of the matter is that our federal orders, particularly federal government orders, have not transitioned from pipeline into backlog. I would say, I was going to say when we expected them to, but I don't even want to say that.

Speaker Change: And so let's confront that head-on.

Speaker Change: The simple fact of the matter is, as I mentioned in my comments, we are Q2 revenues.

Speaker Change: We've generated those revenues absent about $5 million in federal revenues that we'd had in the same quarter in the prior year. And the simple fact of the matter is that our federal orders, particularly federal government orders, have not transitioned from pipeline into backlog.

Desmond Wheatley: This purchase order is for EVR systems, which will be deployed in the Dominican Republic. I can't give any more detail on that on this point, but it is nonetheless a significant validation, not only of our relationship with Jesse, but with a broader strategy of adding sales resources, which are not directly employed by Beam Global and therefore do not contribute to our overhead expenses. We intend to expand on this strategy, adding distributors, resellers and agents across Europe and also across the United States.

Desmond Wheatley: And the simple fact of the matter is that our federal orders, particularly federal government orders, have not transitioned from pipeline to backlog. I was going to say when we expected them to, but I don't even want to say that.

Desmond Wheatley: I don't have expectations about when they will do that. They work on their own timelines. So you could say we have seen some stuff move right. No question about that. We attribute that to certain budget uncertainties and, probably, to some extent, to what's going on around the election at the moment. But here's the important thing. We don't see any of it disappearing. We see it moving right, but we don't see it disappearing

Desmond Wheatley: I don't have expectations about when they do that. They work on their own timeline. So you could say we have seen some stuff move right. No question about that. We attribute that to certain budget uncertainties and probably to some extent to what's going on around the election at the moment. Sullivan. But here's the important thing. We don't see any of it disappearing. We see it moving right, but we don't see it disappearing. And so, while from a quarter-by-quarter impact point of view, which of course is tremendously important to everybody on this call, to our customers, federal, state, even municipal customers, they have little or no concern for the beginning or end of quarters.

Speaker Change: I was going to say when we expected them to, but I don't even want to say that. I don't have expectations about when they do that. They work on their own timeline.

Speaker Change: So you could say we have seen some stuff move right, no question about that. We attribute that to certain budget uncertainties and probably to some extent to what's going on around the election at the moment.

Desmond Wheatley: Until now, all of our sales have been made through our direct sales team and they've done a fantastic job, but we've matured our product and our sales and marketing collateral to a point now where we can engage third parties, train them and have them expose our products to a much larger audience, often with whom they already have existing relations. And we do that without adding to our SGNA burden. Beam Global is performing and we're executing solidly on our strategic plan.

Speaker Change: But here's the important thing, we don't see any of it disappearing.

Desmond Wheatley: And so while from a quarter by quarter impact point of view, which of course is tremendously important to everybody on this call, to our customers, federal, state, even municipal customers, they have little or no concern for the beginning or end of a quarter. But they do have concern for their long-term infrastructure requirements. And as I say, we are not seeing any of this going away; we're simply seeing it moving right. And that, to some extent, explains the increasing size of the pipeline without a rational increase in the size of the backlog. What does that mean?

Speaker Change: We see it moving right, but we don't see it disappearing.

Speaker Change: And so while from a quarter-by-quarter impact point of view, which of course is tremendously important to everybody on this call, to our customers, federal, state, even municipal customers, they have little or no concern for the beginning or end of quarters.

Desmond Wheatley: But they do have concern for the long-term infrastructure requirements. And as I say, we are not seeing any of this going away or simply seeing it moving right. And that, to some extent, explains the increasing size of the pipeline without a rational increase in the size of the backlog. What does that mean? It means what I've been saying for these calls for many quarters. We are going to see this sort of lumpiness from our pipeline to backlog conversion point of view. And it is because, as I said, we, we, one single large federal order changes everything for us.

Desmond Wheatley: In Q1 of 2024, we generated more revenue than any first quarter in our history, and our second quarter revenues, while not a record for the quarter, were higher again than the first quarters at 14.8 million. Our growth profits in the first quarter were also higher than at any time in our history, but the Beam team solidly broke that record in the second quarter, generating more growth profits than ever before. Excluding non-ice cash items, as Lisa has already discussed, we generated about 2.7 million growth profits in the first quarter, or approximately 18% growth margin after non-cash items.

Speaker Change: But they do have concern for their long-term infrastructure requirements. And as I say, we are not seeing any of this going away. We're simply seeing it moving right. And that, to some extent, explains the increasing size of the pipeline without a rational increase in the size of the backlog.

Desmond Wheatley: It means what I've been saying in these calls for many quarters: we are going to see this sort of lumpiness from our pipeline-to-backlog conversion point of view. And it is because, as I said, one single large federal order changes everything for us. Nobody's asking us these questions anymore. I'm confident that that will happen. I am just not going to put a date on when it will happen because I don't control that at all.

Speaker Change: What does that mean? It means what I've been saying in these calls for many co-authors.

Desmond Wheatley: That's up from 1.8 million in Q1 or 10.1%. Now that growth margin did not reflect benefit from the 8 and a quarter percent price increase that went out last year, on about 80% of the EV arc systems we deployed in the quarter. And said another way, we still have a loss of positive impact coming from that price increase, which should contribute to further improvements in our growth profitability as we work through the last of the backlog price before they increase.

Speaker Change: we are going to see this sort of lumpiness.

Speaker Change: from our pipeline to backlog conversion point of view. And it is because, as I said, one single large federal order changes everything for us. Nobody's asking us these questions anymore. I'm confident that that will happen. I am just not going to put a date on when it will happen because I don't control that at all.

Desmond Wheatley: Nobody's asking us these questions anymore. I'm confident that that will happen. I am just not going to put a date on when it will happen because I don't control that at all.

Desmond Wheatley: Then the question becomes, okay, well, what are we doing as a management team to deal with that? We could sit with our face in our hands and say, oh, the Feds have an ordered light we thought they were going to. Therefore, we're missing our numbers. Or we can take active and aggressive steps to broaden the funnel. And that's what we're doing. That's why you've seen this increase in commercial sales. That's why you've seen us move into large markets like Europe. That's why you see us bringing new products to market. And that's why you see us expanding our sales resources through the integration of the resellers, distributors, and sales agents.

Desmond Wheatley: Then the question becomes, okay, well, what are we doing as a management team to deal with that? We could sit with our faces in our hands and say, oh, the feds haven't ordered what we thought they were going to, therefore, we're missing our numbers. Or we can take active and aggressive steps to broaden the funnel. And that's what we're doing. That's why you've seen this increase in commercial sales, and that's why you've seen us move into large markets like Europe.

Speaker Change: Then the question becomes, okay, well, what are we doing as a management team to deal with that? We could sit with our face in our hands and say, oh, the feds haven't ordered like we thought they were going to, therefore we're missing our numbers, or we can take active and aggressive steps.

Desmond Wheatley: Our Q2 net losses, including non-cash items, were approximately 2.1 million dollars, or around three quarters of our growth profit contribution in the quarter. In the first quarter, the loss was two times our growth, and Q2 it was just three quarters. You can see the trend here. Analysts consensus had us at a 21 cent loss per share for the quarter. Our loss excluding non-cash items, which were not built into their models, was approximately 14 cents, so our non-gap performance at the bottom line was considerably better than the expectations on the street.

Speaker Change: to broaden the funnel.

Speaker Change: And that's what we're doing. That's why you've seen this increase in commercial sales. That's why you've seen us move into large markets like Europe. That's why you see us bringing new products to market. And that's why you see us expanding our sales resources through the integration of the resellers, distributors, and sales agents.

Desmond Wheatley: That's why you see us bringing new products to market. And that's why you see us expanding our sales resources through the integration of resellers, distributors, and sales agents. All of these moves are designed to increase the size of our funnel, diversify our revenue opportunities, and give us more ways to soak up any movement right from some of these large customers. I still believe that all of these sales will come. I think that this is a very uncertain year for a whole host of reasons, as I have pointed out before.

Desmond Wheatley: All of these moves are designed to increase the size of our funnel, diversify our revenue opportunities, and give us more ways to soak up any movement right from some of these large customers. I still believe that all of these sales will come. I think that we're, you know, this is a very uncertain year for all host of reasons, as I pointed out before. There's a great deal of uncertainty in the markets, a great deal of uncertain geopolitically. And then, with the elections and everything else coming, we've gone uncertainty around that as well. That inevitably makes people less inclined to press the buy button.

Speaker Change: All of these moves.

Speaker Change: are designed to increase the size of our funnel.

Speaker Change: diversify our revenue opportunities and give us more ways to soak up any movement right.

Speaker Change: from some of these large customers.

Desmond Wheatley: This is a result of our laser focus on profitability as we continue to reduce our cost of goods sold through engineering and operational improvements. Of course, as our price increase takes full effect, we believe will continue to see further margin improvements, and that we're well positioned to hit that very important milestone. Our model shows that if we continue to scrolls margin improvement on a similar level of revenues and make a few other minor adjustments, we'll generate positive cash flow.

Speaker Change: I still believe that all of these sales will come.

Desmond Wheatley: There's a great deal of uncertainty in the markets, a great deal of uncertainty geopolitically. And then with the elections and everything else coming, we've got uncertainty around that as well. That inevitably makes people less inclined to press the buy button.

Speaker Change: I think that we're you know this is a very uncertain year for a whole host of reasons as I pointed out before. There's a great deal of uncertainty in the markets, a great deal of uncertainty geopolitically and then with the elections and everything else coming we've got uncertainty around that as well. That inevitably makes people less inclined to press the buy button but again we're not seeing any of this go away.

Desmond Wheatley: But again, we're not seeing any of this go away. So I think it's just, obviously, we are, as I said in my comments, constantly working on closing those big elephants. But more importantly, strategically for us, is making sure that we have a much wider funnel so that if something does move right, it's backfilled by something else coming in, probably from a different corner of the planet, for all we know. The next question comes from Craig Irwin from Roth Capital. Please go ahead. Hey guys, it's Andrew on for Craig, but how are you? Andrew, how are you? How are you?

Desmond Wheatley: But again, we're not seeing any of this go away. So I think it's just, obviously, we were, as I said in my comments, we are constantly working on closing those big elephants. But more importantly, strategically for us, is making sure that we have a much wider funnel so that if something does move right, it's backfilled by something else coming in, probably from a different corner of the planet, for all we know.

Desmond Wheatley: Exiting the year with a growth margin that's better than double where it was at the end of Q1 is our goal for 2024, and with operating expenses around where they are right now, that would get us to positive cash flow. Long-term, as we scale, we'll be looking for growth margins that are significantly higher. The eighth and the quarter percent price increased coupled with our further improvements in the second quarter, essentially doubles the 10 percent growth we reported in the first quarter, and we've further cost improvements identified.

Speaker Change: So I think it's just.

Speaker Change: Obviously, we're, as I said in my comments, we are constantly working on closing those big elephants, but more importantly, strategically for us, is making sure that we have a much wider funnel so that if something does move right, it's backfilled by something else coming in probably from a different corner of the planet for all we know.

Craig Irwin: The next question comes from Craig Irwin from Roth's Capitol. Please go ahead.

Speaker Change: The next question comes from Craig Irwin from Roth Capital. Please go ahead.

Desmond Wheatley: So, cash flow is very much on our visible horizon towards the end of 2024, and it's a major area of focus for us. As for sales growth, if you take a look at our quarterly filings over the last couple of years, you'll see that we reported quarter after quarter of eight digit sales, even though we've not reported a repeat of some of the very large order sales we made in 2022. Clearly, not reporting these sorts of sales doesn't mean that we haven't been selling.

Unknown Speaker: I think I expect she, it's Andrew answer for Craig, but how are you? How are you? Good, good.

Andrew: It's Andrew for Craig, but how are you? Andrew, how are you? How are you? Good, good. She kind of touched on this on the last question here, but I was wondering if you could provide some more detail on what's working so well in the commercial sales, which is kind of helping out.

Desmond Wheatley: She kind of touched on this on the last question here, but I was wondering if you could provide some more detail on what's working so well on the commercial sales, which is kind of helping out smooth, smooth revenue recognition quarter by quarter? Yep. Yeah, I mean, Barbit's focus, as I said before, you'll remember, we used a very large proportion of our pie, although it was a much smaller pie in those days. It was commercial sales, and then government took over. From that, COVID really shut down our commercial sales efforts. And inevitably, our sales event ended up concentrating more on the places where they were going to make wins, which was government.

Operator: Good, good. You kind of touched on this in the last question here, but I was wondering if you could provide some more detail on what's working so well in commercial sales, which is kind of helping out. Smooth revenue recognition Quarter-by-Quarter. Yep. Yeah, I mean, part of its focus, as I've said before, you'll remember, we used a very large proportion of our pie, although it was a much smaller pie in those days, was commercial sales. And then the government took over from that.

Speaker Change: Smooth, smooth revenue recognition quarter by quarter.

Desmond Wheatley: Nor does it mean that we haven't been delivering record numbers of units to customers all over the United States and now internationally. In fact, the value of our purchase orders in the second quarter of 2024 is about 36 percent higher than they were in the second quarter of 2023. We continue to work on selling the very large orders too, and I see no reason why we should not be successful in those efforts.

Speaker Change: Yep.

Speaker Change: Yeah, I mean part of its focus, as I've said before, you'll remember we used a very large proportion of our pie, although it was a much smaller pie in those days, was commercial sales and then government took over from that. COVID really shut down our commercial sales efforts and inevitably our sales team ended up concentrating more on the places where they were going to make wins, which was government.

Desmond Wheatley: COVID really shut down our commercial sales efforts, and inevitably, our sales team ended up concentrating more on the places where they were going to make wins, which was government. Post COVID, we've seen a return to some of these sales on the EV charting side of the business, but we're also bringing in revenue from other interesting spots where commercial is concerned. It's not all coming from the EV charting products. We are seeing a tremendous return on sales of those types of products into commercial, but also contributions from battery sales and, to some extent, the legacy business from Beam Global and Beam Europe, although a lot of that is also government-based in that we're selling street furniture to municipalities and other places.

Desmond Wheatley: Post COVID, we've seen a return to some of these sales on the EV chart inside of business, but we're also bringing revenue from other interesting spots where commercial is concerned. It's not all coming from the EV charting products. We are seeing a tremendous return to sales of those types of products into commercial, but also contributions from battery sales. And to some extent, the legacy business from being global, although a beam Europe, although a lot of that is also a government based in that we're selling street furniture to municipalities and other government agencies. So it's some of its focus; some of it's just the natural impact of the market.

Desmond Wheatley: First. So, it's hard to pinpoint when because larger sales offer includes more stakeholders and less certainty on timing. What we have seen and continue to see lumpiness in our order cadence, our pipeline, which now stands at over $180 million is the largest in our history. Aside from government business, we're targeting commercial enterprises such as amusement parks, corporate parks and campuses, sporting events, music and other entertainment values, and other facilities and corporate entities that accommodate tens of thousands of cars each day.

Speaker Change: Post-COVID, we've seen a return to some of these sales on the EV charting side of the business, but we're also bringing in revenue from other interesting spots where commercial is concerned. It's not all coming from the EV charting products.

Speaker Change: We are seeing a tremendous return to sales of those types of products into commercial, but also contributions from battery sales, and to some extent, the legacy business from Beam Global, Beam Europe, although a lot of that is also government-based in that we're selling street furniture to municipalities and other...

Desmond Wheatley: So some of it's focus, some of it's just the natural impact of the market. And then a big part of it from an EV charting point of view is, you know, commercial real estate really didn't care about EV charting until a year ago, even because it didn't impact their lease up times or their tenant retention. But as we see more and more EVs on the road, we're going to see much more interest on the part of commercial real estate and EV charting. In my opinion, it will become like Wi-Fi. You will not be able to operate a piece of property that has a commercial aspect to it without offering EV charging.

Desmond Wheatley: Beyond 2024, we believe that the EV standard, which we intend to re-brand to Beam Spot, is going to be a meaningful contributor to sales, cash flow and profits as well. Our sales efforts targeting non-government commercial customers bore further fruit in the second quarter with commercial enterprise sales accounting for about 30% of our revenues during that period, up from about 10% in the same period prior year. Interesting to note that our second quarter revenues included about $5 million less federal government contribution than in the second quarter of 2023.

Speaker Change: Government Agencies.

Desmond Wheatley: And then a big part of it from an EV charting point of view is commercial real estate really didn't care about EV charting until a year ago even, because it doesn't impact their lease-up times or their tenant retention. But as we see more and more EVs on the road, we're going to see much more interest on the part of commercial real estate and EV charging. In my opinion, it will become like Wi-Fi. You will not be able to operate a piece of property that has a commercial aspect to it without offering EV charging. And as that happens, we're going to see a lot of increase in demand for EV charging in general.

Speaker Change: So it's some of it's focus, some of it's just the natural impact of the market, and then a big part of it from an EV charting point of view is...

Speaker Change: You know, commercial real estate really didn't care about EV charting until a year ago, even.

Speaker Change: because it doesn't impact their lease up times or their tenant retention.

Speaker Change: Thank you so much for joining us today, we're going to be talking a little bit about EV charging. We're going to be talking a little bit about EV charging, but as we see more and more EVs on the road, we're going to see much more interest on the part of commercial real estate in EV charging. In my opinion, it will become like Wi-Fi. You will not be able to operate a piece of property that has a commercial aspect to it without offering EV charging. And as that happens, we're going to see a lot of increase in demand for EV charging in general. And we in particular, I believe we'll see a lot of increase in demand because most pieces of commercial property simply don't have sufficient electric circuits and certainly don't want to be digging up their parking lots and their landscaping and everything like that for months on end.

Desmond Wheatley: And as that happens, we're going to see a lot of an increase in demand for EV charging in general. And we, in particular, I believe we'll see a lot of increase in demand because most pieces of commercial property simply don't have sufficient electrical circuits and certainly don't want to be digging up their parking lots and their landscaping and everything like that for months on end to provide it in a way that government entities might be more insensitive to.

Desmond Wheatley: And we in particular, I believe we'll see a lot of increase in demand because most pieces of commercial properties simply don't have sufficient electric circuits and certainly don't want to be digging up their parking lots and their landscaping and everything like that for months on end to provide it in a way that government entities might be more insensitive to. So all of those things lend themselves very much to growth for us in that space.

Desmond Wheatley: And yet, Beam Global 2.2 revenues were up from the first quarter. In other words, we were able to make up for some of the timeships and lumpiness in federal ordertators caused by budget uncertainties and no doubt the upcoming federal election by adding more commercial sales. This is consistent with our strategy to target both commercial and government sales in both the United States and in Europe, and also to diversify revenue opportunities by adding geographic expansion, but also product offering expansion as we've done with batteries and the legacy products which Beam Europe creates.

Speaker Change: to provide it in a way that government entities might be more insensitive to. So all of those things lend themselves very much to growth for us in that space.

Desmond Wheatley: So all of those things lend themselves very much to growth for us in that space. And while we're happy with the increase in commercial business that we've done, that job is nowhere near finished. And I've always said, always, even at times when government revenues were almost 100% of our revenues, I've always said that in the end, this will be a consumer and commercial-led deal. And the great majority of BEAM Global's revenues will come from consumers and commercial customers, although not at the expense of absolute dollars from the government, but at a percentage point. Great, thanks for the color there.

Desmond Wheatley: And while we're happy with the increasing commercial business that we've done, that jobs know we're near finished. And I've always said, always, even at the times when government revenues were almost 100% of our revenues, I've always said that in the end, this will be a consumer and commercial led deal, and the great majority of being global's revenues will come from consumer and commercial, although not at the expense of absolute dollars from government, but from a percentage point. So do you. Great, thanks for the color there.

Speaker Change: And while we're happy with the increase in commercial business that we've done, that job's nowhere near finished. And I've always said, always, even at the times when government revenues were, you know, almost 100% of our revenues, I've always said that in the end, this will be a consumer and commercial-led deal, and the great majority of BEAM Global's revenues will come from consumer and commercial, although not at the expense of absolute dollars from government, but from a percentage point of view.

Desmond Wheatley: We'll have more new revenue opportunities as we add Beam Spot, formerly EV standard, and a couple of other new products which I hope to have out before the end of the year. Our strategy of adding distributors, resellers and agents will, we believe, further enhance our sales efforts as we target EPCs and others involved in the deployment of grid-type EV charting with our rapidly deployed and highly scalable solutions. We give them more ways to say yes to their customers while increasing our sales without increasing our overhead costs.

Desmond Wheatley: My second question was great to see, you know, second straight quarter of very strong gross margins. You really did a great job parsing out the details there on the call. First off, the two parter.

Desmond Wheatley: My second question was great to see; you know, second straight quarter of very strong gross margins. You really did a great job parsing out the details there on the call. First off, the two-parter. One, I guess, how much of the backlog do we have to burn through to see the price increases impact gross margins? And secondly, you talked a bit about the European manufacturing, hypothetically, building the base, base plates in the EU to two to three percent gross margin improvement. There is that kind of what will drive the further increases after you get to, you know, double the one queue levels that you talked about.

Speaker Change: Great, thanks for the color there. My second question, it was great to see, you know, second straight quarter, very strong gross margins. You really did a great job parsing out the details there.

Desmond Wheatley: We've made fantastic progress on the integration of our European acquisition, and we want our first million-dollar European order for EV arc less than five months after we close on that transaction, a milestone that took over five years to achieve in the United States. The legacy business we acquired is also growing and assisting in our efforts to expand our clean technology sales in what is by far the largest market in the world for our products.

Desmond Wheatley: One, I guess, how much of the backlog do we have to burn through to see the price increases impact gross margins? And secondly, you talked a bit about European manufacturing, hypothetically, building the base, base plates in the EU to two to 3% gross margin improvement there. Is that kind of what will drive further increases after you get to, you know, double the one Q levels that you talked about?

Speaker Change: on the call. First off, the two-parter. One, I guess, how much of the backlog do we have to burn through to see the price increases impact gross margins? And secondly, you talked a bit about the European manufacturing, hypothetically.

Speaker Change: building the base plates in the EU to 2-3% gross margin improvement there. Is that kind of what will drive the further increases after you get to double the 1Q levels that you talked about?

Desmond Wheatley: But we haven't even begun to realize what I believe will be the tremendous growth in that market. Our European operations should contribute very favorably to our profitability for several reasons. First, our European team is very good at what they do where the legacy business is concerned. They run that business profitably prior to the acquisition. Second, we're able to produce EV arc systems much less expensively in Europe than we can in the United States.

Desmond Wheatley: Yes, so the first thing to point out is actually about 20% of our Q2 EV arc sales did have the increased price. So that did contribute, only a fifth of them, but that did contribute, and we are rapidly coming to the end of that backlog that we had. There are a few stragglers left over.

Desmond Wheatley: Yes, so first thing to point out is actually about 20% of our Q2 EVR sales did have the increased price, so that did contribute. Only a fifth of them, but that did contribute, and we are rapidly coming to the end of that pre of that backlog that we had. There's a few stragglers left over, so the majority moving forward will include the price increase. So we should benefit from that. Inevitably, there's a, I don't have the exact number of what the units we've got left in backlog at the pre pricing, and I will say there's a couple of our larger contracts.

Speaker Change: Yes, so first thing to point out is actually about 20% of our Q2 EV arc sales did have the increased price, so that did contribute only a fifth of them.

Desmond Wheatley: As we consolidate our financials, those superior growth margins will have a positive effect on our global financials. And there's another exciting impact. Beam Europe can produce certain components and sub-assemblies of EV arcs so inexpensively that it actually makes more sense for us to manufacture there and ship those pieces to the United States for final assembly, further reducing our direct costs and improving our growth profits. First, for example, we can produce and ship EV arc based plates from our European operations so almost less expensive than it costs us to make them in the US, that one component alone will contribute 2 to 3% in growth profit improvement.

Speaker Change: but that did contribute, and we are rapidly coming to the end of that backlog that we had. There's a few stragglers left over, so the majority moving forward will include the price increase.

Desmond Wheatley: So the majority moving forward will include the price increase, so we should benefit from that. Inevitably, I don't have the exact number of units we've got left in backlog at pre-pricing.

Speaker Change: So we should benefit from that.

Desmond Wheatley: And I will say this, a couple of our larger contracts, the GSA type contracts and also California DGS contracts, it's harder for us to integrate that new pricing into them. That's a longer process, and we will not turn down sales from them in the meantime. So that could create some stragglers where that's concerned as well. But moving forward, in general, we're moving into this new pricing structure, and we expect that to be beneficial.

Speaker Change: I don't have the exact number of units we've got left in backlog at the pre-pricing, and I will say this. A couple of our larger contracts...

Desmond Wheatley: The GSA type contracts and also California DGS contract. We're not; it's harder for us to integrate that new pricing into them. That's a longer process, and we will not turn down sales from them in the meantime. So that could, that could create some stragglers where that's concerned as well. But moving forward in general, we're moving into this new pricing structure and we expect that to be beneficial on these savings from, from Europe. It's way beyond theoretical now. This, or hypothetical, I think is the word to use. It's, it's actual. We actually know could we've done it that we can produce the base prize.

Speaker Change: The GSA type contracts and also California DGS contract.

Speaker Change: It's harder for us to integrate that new pricing into them, that's a longer process, and we will not turn down sales from them in the meantime. So that could create some stragglers where that's concerned as well. But moving forward, in general, we're moving into this new pricing structure, and we expect that to be beneficial.

Desmond Wheatley: So our European actors is not only providing us access to the largest market in the world for our products with a reduced cost basis, but it's also contributing to cost reductions in our United States operations. Remember that we paid cash and stock value less than the independently appraised value of the real estate and other hard assets that we acquired through that transaction. At the same time, I believe that the sellers, now our very talented European leadership will do fantastically well as a result of becoming part of Beam Global because of the tremendous growth that we see ahead of us.

Desmond Wheatley: On the savings from Europe, it's way beyond theoretical now, or hypothetical, I think the word to use. It's real. We actually know, because we've done it, that we can produce the base price, in particular this one item, which happens to be a very expensive part of the EV arc. It's the ballast and traction pad, which gives the system its stability in a parking space.

Speaker Change: on the savings from from Europe. It's way beyond theoretical now.

Speaker Change: or hypothetical I think is the word he used.

Speaker Change: It's actual. We actually know, because we've done it, that we can produce the base prize. In particular, this one item, which happens to be a very expensive part of the EV arc, it's the ballast and traction pad, which gives the system its stability in a parking space.

Desmond Wheatley: In particular, this one item, which has to be a very expensive part of the EV arches. It's the, it's the, the ballast and traction pad, which gives the system its stability in a parking space. We know for a fact that we can produce those something like, I don't know, six or eight percent lower price impact on our cogs on our bomb, the bomb aspect of our cogs. But even after shipping them to us across the sea in a container, of course, you can put quite a few of them in a container. We can still pick up this two to three percent gross or COGS reduction gross margin improvement in the US with manufacturing and shipping from, from our European facilities.

Desmond Wheatley: We have more cash in the bank at the end of the second quarter than we did at the end of the first quarter and when considering the other components of our working capital balance, I'm confident that we have sufficient cash to provide for what should continue to be our reducing burn as a result of the continually increasing growth profit contributions described above. Our ending cash balance was $8.7 million up from $5 million at the end of the first quarter.

Desmond Wheatley: We know for a fact that we can produce those at something like, I don't know, 6% or 8% lower price impact on our cogs, on our BOM, the BOM aspect of our cogs. But even after shipping them to us across the sea in a container, of course, you can put quite a few of them in a container, we can still pick up this 2% to 3% gross or cogs reduction, gross margin improvement in the U.S. with manufacturing and shipping from our European facilities.

Speaker Change: We know for a fact that we can produce those at something like, I don't know, 6% or 8% lower price impact on our cogs, on our bomb, the bomb aspect of our cogs, but even after shipping them to us.

Desmond Wheatley: This improvement in our cash position is largely due to payments coming in on some of our larger accounts. It's also consistent with something that I've often mentioned during these costs which is that our working capital balance is actually the most important metric when considering Beam Global's cash health because of our ability to convert inventory, work and progress at AR into cash in a relatively short period of time. But of course, the most interesting indicator here is that as our growth profits improve, the ratio of cash going out to cash coming in goes for improves.

Speaker Change: across the sea in a container, of course you can put quite a few of them in a container, we can still pick up this two to three percent gross or COGS reduction gross margin improvement in the U.S. with manufacturing and shipping from from our European facilities.

Desmond Wheatley: Now, a couple of things come from that. First of all, we're going to do a lot more of that. We're going to identify more pieces and parts that we can manufacture in our serving facilities. Because remember, while we have 50,000 square feet under roof here in the U.S., we've got 250,000 square feet under roof and acres of land upon which we can inexpensively expand in our CRIABO facilities.

Desmond Wheatley: Now, a couple of things come from that. First of all, we're going to do a lot more of that. We're going to identify more pieces and parts that we can manufacture in our serving facilities. While we have 50,000 square feet under roof here in the US, we've got 250,000 square feet under roof and acres of land upon which we can inexpensively expand in our credible facilities. So we've got a lot of tremendous amount of room for expansion there. One of the things I actually like about this is the extent that we can pull some of those requirements out of this 50,000 square foot facility in the US.

Speaker Change: Now, a couple of things come from that. First of all, we're going to do a lot more of that. We're going to identify more pieces and parts that we can manufacture in our serving facilities because, remember,

Speaker Change: Well, we have 50,000 square feet under roof here in the U.S. We've got 250,000 square feet under roof and acres of land upon which we can inexpensively expand in our Criable facilities.

Desmond Wheatley: We'll continue to see a lot of variation in cash on the balance sheet because so much of it's driven by the types of orders we receive and where we are in the process of executing on those orders. Clearly, when we get a large order and we have to produce materials and components to execute on that order, we should see a reduction in cash with a correlate to that being that when those large orders are delivered, we get paid and our cash goes back up.

Desmond Wheatley: So we've got a tremendous amount of room for expansion there. And one of the things I actually like about this is the extent to which we can pull some of those requirements out of this 50,000 square foot facility in the U.S. What that does is it allows us more opportunity for expansion in this facility without having to expand elsewhere to do that because we can reduce the number of tasks that are taking place here.

Speaker Change: So we've got a tremendous amount of room for expansion there. And one of the things I actually like about this is the extent that we can pull some of those requirements.

Desmond Wheatley: Well, that does that allow us else more opportunity for expansion in this facility without having to expand elsewhere to do that, because we can reduce the number of tasks that are taking place here. But the ones that we can do inexpensively into our European facilities and then just concentrate on aspects of the manufacturing and assembly that should happen in this facility.

Speaker Change: Thank you for joining us.

Desmond Wheatley: In the event that we get a very large order and we are always aiming for those, we have our $100 million credit line which is still untapped. But with all other things being equal, our improving growth profits are reducing the burden on our cash. As I said, working capital is probably the most informative metric on our balance sheet. But when looking at working capital, you also need to be considerate of non-cash impacts.

Desmond Wheatley: But the ones that we can do inexpensively in our European facilities and then just concentrate on aspects of the manufacturing and assembly that should happen in this facility. So lots of benefits will come from that. But it's far from hypothetical.

Desmond Wheatley: So what's the benefits will come from that, but it's far from hypothetical. The cost of the savings are already coming into effect, and we will start receiving the first of those balance and traction pads in the fourth quarter, with that reduction in cost again attached to it. So nothing but good news coming from that and not hypothetical actual. Perfect. Well, that's great to hear. Congrats on that continued progress.

Desmond Wheatley: The cost savings are already coming into effect, and we will start receiving the first of those ballast and traction pads in the fourth quarter with that reduction in costs again attached to it. So nothing but good news can come from that. And not hypothetical, but actual.

Desmond Wheatley: Our Q2 working capital ending balance includes over $5 million of non-cash items related to the contingent consideration for the Amiga acquisition or no. Excluding that non-cash impact, you can see that our working capital balance was just $600,000 less in the second quarter than it was in the first quarter. This is another very strong indicator that we're taking the right steps to move us towards positive cash flow. We make tremendous progress on the development of our curbside charging product, the street light replacing EV standard or laterally beam spots as it's been rebanded.

Speaker Change: and we will start receiving the first of those ballast and traction pads in the fourth quarter with that reduction in costs again attached to it. So nothing but good news coming from that and not hypothetical, actual.

Desmond Wheatley: Perfect. Well, that's great to hear. Congratulations on that continued progress, and I'll hop back in the queue. Thank you very much. The next question comes from Ryan B. Riley. Please go ahead.

Unknown Speaker: And I'll hop back in the queue.

Speaker Change: Perfect, well that's great to hear. Congrats on that continued progress and I'll hop back in the queue.

Unknown Speaker: Thank you very much.

Ryan: The next question comes from Ryan at B. Riley. Please go ahead.

Speaker Change: Thank you very much, Andrew.

Speaker Change: The next question comes from Ryan B. Riley. Please go ahead.

Desmond Wheatley: Hey, Desmond. Thanks for I think. I'll stick with the margins and congrats on the improvement again, this quarter.

Operator: Hey Desmond, thanks for taking the time to speak with us. Good, thanks. I'll stick with the margins and congrats on the improvement again this quarter. Wondering what are the additional levers you can pull to enhance margins further beyond Price Increases and International Manufacturing Capacity as we look to next year and 26. Is it mostly scale, or are there other areas that you're looking at? Yeah, so there's no question about scale

Speaker Change: Hey Desmond, thanks for taking the time. Hi Ryan, how are you?

Desmond Wheatley: We've almost all the components in-house now for this new product and our team in Chicago has completed the assembly of the electronics and batteries in the column of the beam spot. We're preparing the location in San Diego where the first system will be installed and I expect that we will stand up the first four two types in the next couple of months at which time we will start to aggressively market this product globally.

Speaker Change: Thanks. I'll stick with the margins and congrats on the improvement again this quarter. Wondering what are the additional levers you can pull to enhance margins further beyond

Desmond Wheatley: Wondering what are the additional levers you can pull to enhance margins further beyond the price increases and international manufacturing capacity as we look to next year and 26. Is it mostly scale, or are there other areas that you're looking at? Yeah, so there's no question about scale, no question of volume helps us. And again, I know there, I know there would be good to go back to our previous question about the mix between pipeline and backlog. I know that that's going to raise some eyebrows and maybe even concern, but I'm not worried about that. I think we, as I said, I know what these what these orders look like.

Speaker Change: the price increases and international manufacturing capacity as we look to next year and 26. Is it mostly scale or are there other areas that you're looking at?

Desmond Wheatley: We also intend to install in Europe I believe it has the potential to be our biggest seller. As a result of our excellent recent acquisitions, we're now also looking at some of the largest opportunities we've ever confronted, and those are not yet closed. I personally believe that we will win one or more of them. We're also working on other new product offerings, which like all of our solutions are in response to very real prospective customer requirements.

Desmond Wheatley: No question that volume helps us. And again, I know there I know there. It would be good to go back to our previous question about the mix between pipeline and backlog. I know that that's going to raise some eyebrows and maybe even concern, but I'm not.

Speaker Change: Yes, so there's no question about scale, no question that volume helps us, and again, I know there are...

Desmond Wheatley: I'm not worried about that. I think we, as I said, I know what these orders look like. And personally, I'm confident that this is moving right, not going away. So I think we get that return and increase in volume. That will definitely help us.

Speaker Change: To go back to our previous question about the mix between pipeline and backlog, I know that that's going to raise some eyebrows, and maybe even concern. But I'm not I'm not worried about that. I think we as I said, I know what these orders look like. I'm.

Desmond Wheatley: I look forward to introducing one or more of these to you in the common quarters. Truth and truth slightly, there's been a good deal of largely unfounded negativity and uncertainty surrounding EVs this year. The EV charting industry has suffered as a result. There have been one or two bankruptcies and some very publicly retreats from the deployment of charting infrastructure. We've seen some debate at the regulatory level in an election year, and we've seen the media run with stories about the heat, the cold, and the performance of EV charting stations.

Desmond Wheatley: I'm personally, I'm confident that this is moving right, not, not going away. And so I think we get that return and increase in volume. That will definitely help us beyond that. We still have elements engineering and an operational improvement, which we still haven't fully benefited from yet. I think we're going to see further benefits from our activities in Europe. And then the truth is you get to remember that we are we've been operating in what for us has been a hyper hyper-inflationary environment. I think I don't quote me on this, but, or if you want to quote me, double check on this, but I think we've seen something north of 30% increase in the prices that we have paid for our bomb since the beginning of the inflationary period back in COVID, 30%.

Desmond Wheatley: I know that I'm not alone in believing that none of this uncertainty or negativity will impact the long-term inevitability of the electrification of transportation, and the solutions like ours are going to continue to attract capital and generate great returns from investors over time and as the business materials and scales. There's a strong case to be made that the automakers will find the way to manufacture EVs more profitably than the current internal combustion engine models.

Speaker Change: I'm I personally I'm confident that this is moving right not not going away so I think we get that return an increase in volume.

Desmond Wheatley: Beyond that, we still have elements of engineering and operational improvement that we haven't fully benefited from yet. I think we're going to see further benefits from our activities in Europe. And then the truth is, you got to remember that we've been operating in what for us has been a hyper hyperinflationary environment. I think don't quote me on this, but or if you want to quote me, double check on this.

Speaker Change: That will definitely help us.

Speaker Change: Beyond that, we still have elements of engineering and operational improvement, which we still haven't fully benefited from yet.

Speaker Change: I think we're going to see further benefits from our activities in Europe.

Speaker Change: And then the truth is

Speaker Change: You've got to remember that we've been operating in what, for us, has been a hyperinflationary environment. Don't quote me on this, or if you want to quote me, double check on this, but I think we've seen something north of 30% increase in the prices that we have paid for our bomb since the beginning of the inflationary period back in COVID, 30%.

Desmond Wheatley: But I think we've seen something north of 30% increase in the prices that we have paid for our bomb since the beginning of the inflationary period back in Covid, 30%. And if you think about that, what that means is we have absorbed all of those costs and yet brought our gross profit to 16%, gap 18% net of non-cash items, which is the amortization of intangible asset value resulting from our battery company deal.

Desmond Wheatley: And if you think about that, what that means is we have absorbed all of those costs and yet brought our growth profit to 16% gap, 18% net of non-cash items, which is an amortization of intangible asset value, resulting from our battery company deal. So we essentially we've absorbed the 30% increasing costs and and we're a bomb heavy company. Labor is a low part of the contribution to our hard deal. So absorbed 30% of absorbed 30% increase in cost due to inflation and yet brought our growth profitability from minus 15% to positive 15% in the at the same time, which is basically like a 60% improvement in cost reduction.

Desmond Wheatley: It's also a fact that approximately half of traditional car company employees are paid to make engines in gearboxes. Electric vehicles have no engines or gearboxes. The harsh reality is that car companies will be able to operate with half as many employees in the near future making cars, which are like computers on wheels. Just like computers, those cars will get cheaper by leaps and bounds while offering more and more functionality to the consumer.

Speaker Change: And if you think about that, what that means is we have absorbed all of those costs.

Speaker Change: Associates, and yet brought our gross profit to 16%.

Speaker Change: Thank you.

Desmond Wheatley: So we've essentially absorbed a 30% increase in cost. And we're a bomb heavy company. Labor is a small part of the contribution to our deal.

Desmond Wheatley: No car company will cling to the old technology in the face of these radical new competitive advantages. Just note Volkswagen's recent $5 billion investment in Rivian. Government tailwinds like Europe's banning of diesel and gasoline vehicles in 2035. By the way, California and many other U-states have the same or similar bands. And all the other regulations which are making polluting harder and more expensive will continue to play a role. But actually consumer choice and profitability of the car companies will be the biggest drivers of this revolution.

Desmond Wheatley: So absorb a 30% increase in cost due to inflation and yet bring our gross profitability from minus 15% to positive 15% at the same time, which is basically like a 60% improvement in cost reduction when you combine those two things. We've still got more to do. We're getting better and better at this, engineering improvements, operational improvements, and then the fact that we are now starting to see stabilization in the price of components and even reductions in the price of components that we integrate. Chief amongst those we've got would be battery cells. Battery cells dropped precipitously for the first 10 or so years that we made the product.

Speaker Change: And we're a bomb heavy company, labor is a low part of the contribution to our deal. So absorbed 30% of absorbed 30% increasing costs due to inflation, and yet brought our gross profitability from minus 15% to positive 15% and at the same time, which is basically like a 60% improvement in cost reduction.

Desmond Wheatley: When you combine those two things, we've still got more to do. We're getting better, better, and better at this engineering improvements operational improvements. And then the fact that we are now starting to see stabilization in the price of components and even reductions in the price of components that we integrate, chief amongst those we've got, but would be battery cells. Battery cells dropped precipitously for the first 10 or so years that we made the product. We thought that was going to continue without stopping. But then when COVID came along, battery cells turned around and started getting more expensive again.

Speaker Change: when you combine those two things.

Speaker Change: Um...

Speaker Change: We've still got more to do. We're getting better and better at this, engineering improvements, operational improvements. And then the fact that we are now starting to see stabilization in price of components, and even reductions in price of components that we integrate. Chief among those we've got, would be battery cells.

Desmond Wheatley: Far from being impossible to make profitably, EVs will become far more profitable for OEMs and gas and diesel vehicles. And it's true that a lack of charting in infrastructure and lack of capacity on the utility grids, along with the vulnerability created by blackouts, will continue to present major challenges to the broad electric vehicle ecosystem. So will the electric requirements of artificial intelligence, data centers, and the electrification of industry? But these are all challenges for beam global.

Desmond Wheatley: We thought that that was gonna continue without stopping. But then when COVID came along, the battery cells turned around and started getting more expensive again. We had to absorb all of that. Remember, we never increased our prices during any of this until this latest price increase, which I've expanded on enough for everybody to hear about it. So there's a combination of things going on, larger market forces at work, but also, most of it's gonna come from our own improvements.

Speaker Change: Mastery cells dropped precipitously for the first 10 or so years that we made the product.

Speaker Change: Thank you for joining us.

Desmond Wheatley: We had to absorb all of that. Remember, we never increased our prices during any of this until this latest price increase, which we, which I've expanded on enough for everybody to hear about it. So we are there's a combination of things going on, larger market forces at work, but also are just most of it's going to come from our own improvements. The frankly, the other thing that's really cool is we're learning from our Europeans. The truth is they have been doing what we have been doing in this building for the last two or four years.

Desmond Wheatley: These are exactly the sort of opportunities that we've developed this fantastic company to exploit. In fact, as it gets harder and harder to deploy traditional grid-tight EV charting infrastructure as the EV locations in grid-to-passes are used up, beam global products will become increasingly and more urgently required. Just a quick point on the U.S, election and how it works. I've heard it said that if Trump returns the presidency, we will see a reversal of the IRA funding and a generally negative environment for electric vehicles.

Speaker Change: for everybody to hear about it. So we are, there's a combination of things going on, larger market forces at work, but also just most of it's going to come from our own improvements.

Desmond Wheatley: Frankly, the other thing that's really cool is we're learning from our Europeans. The truth is, they have been doing what we have been doing in this building for the last three or four years. They have been doing it for 30 years. They're really good at it. It's just been a great combination, frankly.

Speaker Change: Frankly, the other thing that's really cool is we're learning from our Europeans.

Speaker Change: The truth is, they have been doing what we have been doing in this building for the last

Desmond Wheatley: They've been doing for 30 years. They're really good at it. It's just been a great combination, frankly. And so between all of us, we're going to continue to drive the price of down. And I think we've still got a lot further to go.

Speaker Change: this past three or four years, they've been doing for 30 years.

Desmond Wheatley: I don't think this is true. More IRA funds are slated for Republican states than Democrats. Crack. Just last week, 18 members of the House of Republican Delegation sent a letter to speak of the House, Mike Johnson, to prioritize business and market certainty around the Installation Reduction Act. The group of Republican lawmakers wrote, prematurely repealing energy tax credits, particularly those which are used to justify investments that are already broke ground, would undermine private investments and stock development that's already undergoing.

Speaker Change: They're really good at it. It's just been a great combination frankly. And so between all of us we're going to continue to drive the pricesdown and I think we've still got a lot further to go. I have said in the past that my goal is to get to 50% gross profit and I am standing by that goal.

Desmond Wheatley: And so between all of us, we're gonna continue to drive prices down. And I think we've still got a lot further to go. I have said in the past that my goal is to get to 50% gross profit, and I'm standing by that goal. Great, I really appreciate that additional color.

Desmond Wheatley: A full repeal would create a worst case scenario where we would have spent billions of taxpayer dollars and received nothing in return. And again, that's from 18 members of the House of Republican Delegation to speak of Mike Johnson. By the way, I've met with 14 of those Republicans during our trips to Washington DC, and we find them fully appreciate the value proposition of our products. And we're confident that a Republican-led Congress will not turn its back on energy investments made in IRA despite what you mean here on television.

Desmond Wheatley: I have said in the past that my goal is to get the 50% growth profit, and I'm standing by that goal. Great. I really appreciate that additional color.

Desmond Wheatley: For my follow-up on the beam spot, what are the final boxes to check before that hits the market? And when do you see that ramping to the point where it becomes a meaningful portion of the overall sales? That's the sort of question that I ask around here, Andrew, except you did it without expletives.

Desmond Wheatley: For my follow-up on the beam spot, what are the final boxes to check before that hits the market? And when do you see that ramping to the point where it becomes a meaningful portion of the overall salesmex? That's a sort of question that I ask around here, and I do, except you did it without expletives. It brings in your product to market, particularly a quite large and complex piece of equipment, is always challenging, and nothing, nothing ever happens as fast as I wanted to. However, as I said in the call in my comments, I absolutely report to you that our team in Chicago has now done the integration of the components into the call of the beam spot and that we are, in fact, doing what we need to do in San Diego to be able to stand the first of those up.

Speaker Change: Great, I really appreciate that additional caller.

Speaker Change: For my follow-up on the bean spot, what are the final boxes to check before that hits the market and when do you see that ramping to the point where it becomes a meaningful portion of the overall sales mix?

Speaker Change: That's the sort of question that I ask around here, Andrew, except you did it without expletives.

Desmond Wheatley: You look it bringing a new product to market particularly a large and complex piece of equipment is Always challenging and nothing nothing ever hands as fast as I wanted to however as I said in the call in my comments I I can absolutely report to you that our team in Chicago has now Done the integration of the components into the into the column of the beam spot and that we are in fact Doing what we need to do in San Diego to be able to to stand the first of those up We're going to do the same thing in our European facilities, and those will what the great thing that they will do is They will give us something real that we can show to people and we intend to do that It's one of the big reasons that we selected San Diego over Chicago to do the first installations is because we've got a lot of people that we're going to bring by here and I actually show them the system, you know in operation charting a car You know doing what it doing it what it needs to do, I anticipate a couple of things. The first one is, you know, the first prototype systems that we put out will not be anywhere near as good as those that we take to market. We've already learned a lot putting the first one together. Our engineering team's fantastic. They model everything. Everything happens on computer screens before we touch anything physical.

Speaker Change: as well.

Desmond Wheatley: EVs are inevitable for reasons which go way beyond the scope of the president, whoever that turns out to be. Energy security and made in America products like ours are popular on both sides of the aisle. I know because I often meet with more Republican members of government than Democrat and always get a very positive reception. In summary, we're continuing to sell great products to a market that needs them. We're continuing to improve our growth profits.

Speaker Change: I can absolutely report to you that our team in Chicago has now done the integration of the components into the column of the BEAM Spot and that we are in fact doing what we need to do in San Diego to be able to stand the first of those up. We're going to do the same thing in our European facilities. The great thing that they will do is they will give us something real.

Desmond Wheatley: We're going to do the same thing in our European facilities, and those will, the great thing that they will do is they will give us something real that we can show to people, and we intend to do that. It's one of the big reasons that we selected San Diego over Chicago to do the first installations because we've got a lot of people that we're going to bring by here and I actually show them the system in operation, charting a car, doing what it needs to do. I anticipate a couple of things. The first one is the first prototype systems that we put out will not be anywhere near as good as those that we take to market.

Speaker Change: that we can show to people. And we intend to do that. It's one of the big reasons that we selected San Diego over Chicago to do the first installation, is because we've got a lot of people that we're going to bring by here. And I actually show them the system in operation, charting a car, you know, doing it what it needs to do.

Desmond Wheatley: We had cash flow firmly in our sites. We're expanding our product offerings, our geographic reach, and our selling resources. And we have sufficient cash and other tools to continue executing on this plan without going to the markets to do a raise. 2024 with its elections and wars and other tensions and uncertainties is going to be a difficult year and one way or another for most companies. But beam global is taken the necessary steps to get stronger and better and to continue on our trajectory to become a highly profitable, important, and sustainable global provider of the sorts of products and services that will provide an essential role in all of our futures.

Speaker Change: I anticipate

Speaker Change: a couple of things. The first one is, you know, the first prototype systems that we put out will not be anywhere near as good as those that we take to market. We've already learned a lot putting the first of them together. Our engineering team is fantastic. They model everything. Everything happens on computer screens before we touch anything physical, but inevitably when we start making them, we find ways to make them better and less expensive and more efficient and everything else, just as we have done with EVARC. We're bound to do that with EV standard as well, but that will not stop us selling it.

Desmond Wheatley: We've already learned a lot in the first them together. Our engineering team is fantastic. They model everything out. Everything happens on computer screens before we touch enemy physical, but inevitably, when we start making them, we find ways to make them better and less expensive and more efficient and everything else. I just as we have done with EV arc. We're about to do that with EV standard as well, but that will not stop us selling it. The sales cycle we anticipate will be slightly longer with EV standard than it is in many cases with EV arc because we think that the unit sales will be larger and it will be more of a large-scale infrastructure deployment than one Z2 Z sales.

Desmond Wheatley: But inevitably, when we start making them, we find ways to make them better and less expensive and more efficient and everything else, just as we have done with the EV Arc. We're bound to do that with EV Standard as well, but that will not stop us selling it. The sales cycle we anticipate will be slightly longer with EV Standard than it is in many cases with EV Arc, because we think that the unit sales will be larger and it will be more of a large scale infrastructure deployment than onesie-twosie sales, although, as I think I said last time, I'm starting to rethink that a little bit because we do now think that there's a lot of opportunity for these in parking lots of shopping malls and places like that where maybe they would buy one or two or three or four of them, and that sales cycle could be a lot shorter and the benefits to them are tremendous, highly visible, rapidly deployed, and all the other things that go along with it.

Desmond Wheatley: Microcaps are creating a 23-year loss. Growth stocks, particularly in the EV and clean technology sectors, have been especially hard hit. However, the inevitable inevitability of these industries is no longer in question. We expect that quality companies with quality products and good financial discipline will re-reward between the cycle turns as they always have in the past. I believe that beam global is just that sort of company and I'm proud to be part of it. Thank you for your continued support. Our best days are ahead of us.

Speaker Change: The sales cycle, we anticipate, will be slightly longer with EV Standard than it is in many cases with EV York.

Speaker Change: because we think that the unit sales will be larger and it'll be more of a large-scale infrastructure deployment than onesie-twosie sales. Although, as I think I said last time, I'm starting to rethink that a little bit because we do now think that there's a lot of opportunity for these in parking lots of shopping malls and places like that where maybe they would buy one or two or three or four of them and that sales cycle could be a lot shorter and the benefits of them are tremendous, highly visible, rapidly deployed and all the other things that go along with it.

Desmond Wheatley: Although, as I think I said last time, I'm starting to rethink that a little bit because we do now think that there's a lot of opportunity for these in parking lots of shopping malls and places like that where maybe they would buy one or two or three or four of them, and that sales cycle could be a lot shorter than the benefits of them are tremendous, highly visible, rapidly deployed, and all the other things that go along with it. But our plan right now is to get the first prototype stood up operating, and then we will start to really aggressively market them here and still within this year, and then I think we anticipate that we'll start to see the first meaningful revenue from them into 25.

Desmond Wheatley: And I'll now return the call to Lisa and the operator to take your questions.

Operator: We will now begin the question and answer session to ask a question you may pass star then one on your touch and phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

Desmond Wheatley: But our plan right now is to get the first prototype up and running, and then we will start to really aggressively market them here still within this year. And then I think we anticipate that we'll start to see the first meaningful revenue from them in the next 25. Great, appreciate it Desmond. I'll turn it back.

Speaker Change: Our plan right now is to get the first prototype stood up operating, and then we will start to really aggressively market them here, still within this year. I think we anticipate that we'll start to see the first meaningful revenue from them into 25.

Sameer Joshi: The first question comes from Samir Joshi from H.C. Wainwright. Please go ahead. Hi, Samir, how are you? He's good. How are you? Thanks a lot for my questions.

Unknown Speaker: Great. Appreciate it.

Unknown Speaker: That's what I'll turn it back. Thank you.

Noel Parks: The next question comes from Noel Parks from Kerry Brothers. Please go ahead. I know. Hi. How you doing? Okay. I've got some jets flying over. Just give me a second here. No problem. Merrima flight fast. I'm on. Sure. I think that that sounds like the last of them disappearing over the horizon. Okay. Sorry. No good. Life on the road. I hear you.

Desmond Wheatley: Thank you. The next question comes from Noel Parks from Tiwi Brothers. Please go ahead.

Speaker Change: Great, appreciate it Desmond, I'll turn it back.

Desmond Wheatley: Thank you.

Desmond Wheatley: Just the interesting development, the British Ministry of Defence, can you share what is the possible, like the scope and scale of this, say, contribution from this source in 2025? Sorry, Samir, can you run that one by me again? I missed I broke up a little bit. Oh, sorry, can you hear me? Yes. Yeah, the British Army, but they knew all those in 2025. Look, I hate to guess that any of our customers is going to do in the future.

Operator: Hi Noel. Hi. How are you doing?

Speaker Change: The next question comes from Noel Parks from Tiwi Brothers. Please go ahead.

Noel Parks: Okay, I've got some jets flying over. Just give me a second here. No problem. Miramar Flight Path, I'm on. I think that sounds like the last of them, disappearing over the horizon.

Speaker Change: Hi Noel. Hi. Hi, how you doing?

Noel Parks: Okay, I've got some jets flying over. Just give me a second here.

Speaker Change: No problem.

Speaker Change: Dr. Paret.

Speaker Change: Merrimore flight path I'm on

Speaker Change: I think that sounds like the last of them.

Noel Parks: Okay, life on the road. I hear you. Um, you know, in terms of your sales and marketing organization, and you mentioned larger sales, uh, more stakeholders, less certainty of timing. And, um, are those just internal process things that really, you know, vendors are generally able to control within a customer? Or do you feel it from your side?

Speaker Change: disappearing over the horizon.

Desmond Wheatley: You know, I'm just thinking about the terms of your sales and marketing organization, and you mentioned larger sales can be more stakeholders, less certainty of timing. And you know, I go shift internal classes things that really, you know, tenders is generally able to control, you know, within a customer. Or do you feel it from the inside? Do you have the resources to move customers along as fast as you can? And we are, of course, there are class considerations there about, you know, the first month, and then moving it along, the hand holding and the closing and everything.

Speaker Change: Life on the road, I hear you. You know, I'm just thinking about...

Speaker Change: In terms of your sales and marketing organization, you mentioned larger sales, more stakeholders, less certainty of timing.

Desmond Wheatley: Clearly, they, as I said in my comments, they have the same challenges and requirements that the US military has. The British government has a similar mandate for the electrification of its entire white fleet by 2027, white fleet meaning non-tactical vehicles. Just on Cypress alone, there are 650 fleet vehicles. They are all of which we will have to electrify. And that's going to be the case across British government, military and everybody else.

Desmond Wheatley: Do you have the resources to move customers along as fast as you can? And realize, of course, there are cost considerations there about, you know, first and foremost, and moving it along the handholding and the closing and everything. So just, you know, where do you feel like those are in balance, what you need and and what you can accomplish with just moving customers along? Yeah, so no, I don't think they're in balance.

Speaker Change: You know, are those just internal process things that really, you know, vendors

Speaker Change: is generally able to control, you know, within a customer.

Speaker Change: do you feel it from your side? Do you have the resources to move customers along as fast as you as you can? There are, of course, there are cost considerations there about the personnel involved.

Desmond Wheatley: So look, they're going to need an awful lot of EV charging. The British doesn't, they don't have as many overseas bases or the scale of the US have by any means, but they have a lot of them. And then they also have a lot of requirements on the mainland and our products are very well suited to solving their problems. So we did an exemplary job. I'm really proud of the team that did a fantastic job of both manufacturing, shipping and delivering in that new market.

Desmond Wheatley: So just, you know, where do you feel like those are in balance, what you need and what you can accomplish with them just moving customers along?

Speaker Change: moving it along, the hand-holding and the closing and everything. So just, you know, where do you feel like those are in balance, what you need and what you can accomplish with just moving customers along?

Desmond Wheatley: Yes, so I don't think they're in balance, and that's why we're making the changes that we're making. But let me come back to that. The new selling resources that we're engaging will not do anything to move our existing backlog along or convert our existing pipeline into backlog. That's not their purpose at all. Our current sale seems done a fine job of that. Our current sale seems responsible for everything in the $185 million or whatever pipeline that we have right now, and for all the revenue that we've ever generated. What's actually happened, and I actually view this to be one of the most important aspects of our business today as I'm talking to you.

Desmond Wheatley: And that's why we're making the changes that we're making. But let me come back to that. The new selling resources that we're engaging will not do anything to move our existing backlog along or convert our existing pipeline into backlog. That's not their purpose at all.

Speaker Change: Yeah, so no, I don't think they're imbalanced and that's why we're making the changes that we're making but let me come back to that

Speaker Change: The new selling resources that we're engaging will not do anything to move our existing backlog along or convert our existing pipeline into backlog.

Desmond Wheatley: So you can think of that from a logistics point of view for us. We manufacture those products in our new European facilities. And then we ship them overland and across the Mediterranean Sea to an island in the middle of the Mediterranean Sea. And then we deploy them successfully on four different military bases in Cypress without incident. And they're operating perfectly right now. So I'm very proud of all that way that went.

Speaker Change: That's not their purpose at all. Our current sales team has done a fine job of that. Our current sales team is responsible for everything in the $185 million or whatever pipeline that we have right now, and for all the revenue that we've ever generated.

Desmond Wheatley: Our current sales team has done a fine job with that. Our current sales team is responsible for everything in the $185 million or whatever pipeline that we have right now and for all the revenue that we've ever generated. What this is that what's actually happened, and I actually view this to be one of the most important aspects of our business today as I'm talking. What happened is that we've talked for many years about engaging with resellers and distributors and agents, and in the past, our own processes, our own sales collateral, our own ability to understand the selling cycle, and everything else has not been mature enough to actively engage outside resources because, frankly, we were kind of learning as well while we were going along.

Speaker Change: what this is that what we what's actually happened and I am I actually view this to be one of the most important aspects of our business today as I'm talking to you

Desmond Wheatley: That will give that customer indication of the value of these products, the ease of deployment and the security of the electricity. Don't forget particularly an overseas bases. You're often relying on the locals for electricity, which is not necessarily the best thing from a strategic or tactical point of view. So we're solving an awful lot of problems with them. And then last they'll tell you this, they're, they're, they're, they're, the EV charging is almost a boring aspect to this.

Desmond Wheatley: What's happened is we've talked for many years about engaging with resellers and distributors and agents, and in the past, our own processes, our own sales collateral, our own ability to understand the selling cycle and everything else has not been mature enough to actively engage outside resources, because, frankly, we were talking about kind of learning as well while we're going along. What's changed is that we now are confident in the products being developed and changing and everything else, right? But what's changed is that we are now at a point where we're confident enough in the product development.

Speaker Change: What's happened is we've talked for many years about engaging with resellers and distributors and agents.

Speaker Change: and we in the past.

Speaker Change: Our own processes, our own sales collateral, our own ability to understand the selling cycle and everything else has not been mature enough to actively engage outside resources because, frankly, we were kind of learning as well while we were going along.

Desmond Wheatley: What they're really interested in is the other power, you know, the E power panel, the auxiliary power panel we have on these things and their ability to run other systems. So I can't even go into detail on, but their ability to do a whole else with this dispatchable electricity in these types of environments.

Desmond Wheatley: What's changed is that we are now confident, and the product's been developing and changing and everything else, but what's changed is that we're now at a point where we're confident enough in the product development, we are confident enough in our understanding of the sales cycle, the types of customers and people we're going after, and we are also confident enough in the sales collateral we have developed to where we can finally start to engage outside selling resources. And the reason I'm so excited about this is because, again, go back to what I just said; our internal sales team of four or five people has sold everything that we've ever made.

Speaker Change: What's changed is that we now are confident, and the product's been developing and changing and everything else, right?

Desmond Wheatley: We are confident enough in our understanding of the sale cycle, the types of customers that people are going after. And we are also confident enough in the develops and sales collateral to where we can finally start to engage outside selling resources. And the reason I'm so excited about this is because, again, go back to what I just said, our internal sales team of four or five people has sold everything that we've ever revenue. Imagine how it's going to be when we've got 50 or 100 similar people around the world telling the same story to the same type of customer prospects that our internal salespeople can't get to because there aren't enough hours in the data.

Speaker Change: But what's changed is that we're now at a point where we're confident enough in the product development.

Sameer Joshi: So kind of a long answer to tell you I'm, I'm very bullish about our prospects for them, but I'm not going to put a number on it. No, no, this is, this is good color. Thanks for that. In terms of the pipeline that you have, it's not grown nicely from, I think, 160 to 183.

Speaker Change: We are confident enough in our understanding of the sales cycle, the types of customers and people we're going after. And we are also confident enough in the developed sales collateral to where we can finally start to engage outside selling resources.

Desmond Wheatley: Can you provide some color on like, is this mostly amiga related or Illinois based or California based orders? And also, is there like how you practice what is your conversion rate from pipeline to orders? Yeah, and the last part of your question is obviously very relevant at the moment. So just to give you, you know, the majority of the pipeline in from a dollar's point of view is still coming from our sustainable EV charging products.

Speaker Change: The reason I'm so excited about this is because, again, go back to what I just said, our internal sales team of four or five people has sold everything that we've ever revenued.

Desmond Wheatley: Imagine how it's going to be when we've got 50 or 100 similar people around the world telling the same story to the same type of customer prospects that our internal sales people can't get to because there aren't enough hours in the day; you just can't make that many phone calls. You know, there are 380 million people in the United States of America. How many of them can five salespeople call, right?

Speaker Change: Imagine how it's going to be when we've got 50 or a hundred.

Speaker Change: similar people around the world telling the same story to the same type of customer prospects that our internal salespeople can't get to because there aren't enough hours in the day that you just can't make that many phone calls. You know, there are 380 million people in the United States of America. How many of them can five salespeople call, right? And as we look at Europe and those other markets, and this was really what precipitated us starting in Europe with Jesse, is Europe is different to the United States in that while the EU in particular is one economic bloc, it's still very culturally different border to border.

Desmond Wheatley: You just can't make that many phone calls. You know, the 380 million people in the United States of America, how many of them can five salespeople call, right? And as we look at Europe and those other markets, and this was really what precipitated us starring in Europe with Jesse, is different to the United States in that while the EU in particular is one economic block, it's still very culturally different border to border. Frenchmen are not the same as Germans are not the same as Spaniards are not the same as Maltese. It's as simple as that, and I've no doubt I'll get letters for making nationalist distinctions or something here, but I'm sure you understand what I'm talking about.

Desmond Wheatley: We think that we're going to see a significant increase in that coming from Europe because of course we're just beginning to get those products out. I'm going back over there in a couple of weeks to do some more selling. And we're really going to hit that hard, but we think we'll see, we'll see a really big pick up from that, but the majority of the pipeline is still coming from our sustainable EV charging infrastructure products.

Desmond Wheatley: And as we look at Europe and those other markets, and this was really what precipitated us to start in Europe with Jesse, Europe is different from the United States in that while the EU in particular is one economic bloc, it's still very culturally different from border to border. Frenchmen are not the same as Germans, are not the same as Spaniards, are not the same as Maltese.

Speaker Change: Frenchmen are not the same as Germans, are not the same as Spaniards, are not the same as Maltese. It's as simple as that and I know that I'll get letters for making nationalists.

Desmond Wheatley: It's as simple as that, and I have no doubt I'll get letters for making nationalist distinctions or something here, but I'm sure you understand what I'm talking about. And so what we're determined to do is to find people in those environments. Jesse, of course, covers Spain, Portugal, and the Spanish-speaking Caribbean because they're already there.

Desmond Wheatley: And then obviously we're also getting contributions from our battery business in Chicago and then increasingly from the both the legacy business. But what I'm really excited about is increasing the sustainable EV charging product business in Europe. But the last part of your question is obviously something which is, you know, on the point of my attention the whole time because we've got combination of things going on. Good news is the pipeline is increasing.

Desmond Wheatley: And so what we're determined to do is to find people in those environments. Jesse, of course, covers Spain, Portugal, and the Spanish-speaking Caribbean because they're already there. They're culturally and linguistically very aligned, and they're already doing business there, and they have all the relationships there and everything else. Furthermore, I've known Jesse for years. I've been engaged with him for years and know them to be well-connected and a well-organizing and good platform. There are several other entities just like Jesse out there. And look at what Jesse's done. We signed a distributor agreement with him, and we already have an order from them.

Speaker Change: Distinctions or something here, but I'm sure you understand what I'm talking about. And so what we're determined to do is to find people in those environments. Jesse, of course, covers...

Desmond Wheatley: They're culturally and linguistically very aligned, and they're already doing business there. And they have all the relationships there and everything else. Furthermore, I've known Jesse for years. I've been engaged with them for years and know them to be well connected, and a well-organized and good platform. There are several other entities just like Jesse out there. And look at what Jesse's done.

Speaker Change: Spain, Portugal, and the Spanish-speaking Caribbean, because they're already there. They're culturally and linguistically very aligned, and they're already doing business there, and they have all the relationships there and everything else. Furthermore, I've known Jesse for years.

Jesse: I've engaged with them for years and know them to be well-connected and a well-organizing and good platform. There are several other entities just like Jesse out there and look at what Jesse's done. We signed a distributor agreement with them and we already have an order from them.

Desmond Wheatley: The bad news is that the backlog is not increasing with it, at least not at the pace that it should be. And so let's confront that head on. The simple fact of the matter is we, as I mentioned in my comments, we are two two revenues. We generate those revenues absent about five million in federal revenues that we've had in the same core in the prior year. And the simple fact of the matter is that our federal orders, particularly federal government orders, have not transitioned from pipeline into backlog.

Desmond Wheatley: We signed a distributor agreement with them, and we already have an order from them. This is just a fantastic time for us to multiply up our sales team's efforts, not impacting the current pipeline, not impacting current revenue, adding tremendously to the pipeline. That's my plan.

Desmond Wheatley: This is just a fantastic time for us to multiply up our sales team's efforts, not impacting current pipeline, not impacting current revenues, adding tremendously to the pipeline. That's my plan, that's my intention, and that is my expectation. Converting that pipeline to backlog and doing all of it without adding to our SG&A costs. So we will not have an increase in operating costs. We will have no increase in cash burden or anything else, but we will have a tremendous increase in resources out there selling our products. And those resources, by the way, get paid when and only when we successfully collect from our customers for the products that they sell.

Speaker Change: This is just a fantastic time for us to multiply up our sales team's efforts, not impacting current pipeline, not impacting current revenues.

Speaker Change: Adding tremendously to the pipeline, that's my plan, that's my intention, and that is my expectation. Converting that pipeline to backlog, and doing all of it without adding to our SG&A costs, so we will not have an increase in operating costs.

Desmond Wheatley: That's my intention, and that is my expectation, converting that pipeline to backlog and doing all of it without adding to our SG&A costs. So we will not have an increase in operating costs.

Desmond Wheatley: I would say, I was going to say when we expected them to, but I don't even want to say that. I don't have expectations about when they do that. They work on their own timeline. So you could say we have seen some stuff move right. No question about that. We attribute that to certain budget uncertainties and probably to some extent to what's going on around the election at the moment. Sullivan. But here's the important thing.

Desmond Wheatley: We will have no increase in cash burden or anything else, but we will have a tremendous increase in resources out there selling our product. And those resources, by the way, get paid when and only when we successfully collect from our customers for the products that they sell. So it's a very low risk.

Jesse: We will have no increase in cash burden or anything else, but we will have a tremendous increase in resources out there selling our products. And those resources, by the way, get paid when and only when we successfully collect from our customers for the products that they sell. So it's a very low risk. Yeah, we'll have to invest something in a bit of training and giving them sales collateral and all that sort of stuff. Although in Jesse's case, they actually produce the sales collateral. We just give them the guidance on it.

Desmond Wheatley: We don't see any of it disappearing. We see it moving right, but we don't see it disappearing. And so while from a quarter by quarter impact point of view, which of course is tremendously important to everybody on this call, to our customers, federal, state, even municipal customers, they have little or no concern for the beginning or end of quarters. But they do have concern for the long-term infrastructure requirements. And as I say, we are not seeing any of this going away or simply seeing it moving right.

Desmond Wheatley: So it's a very low risk. Yeah, we'll have to invest something in a bit of training and giving them sales collateral and all that sort of stuff. Although in Jesse's case, they actually produce the sales collateral. We just give them the guidance on it. But there will be some time investment of time and energy, but the simple part of the matter is we're going to get a tremendous increase, leveraging up of our selling resources, but without any commensurate increase in our operating and overhead costs.

Desmond Wheatley: Yeah, we'll have to invest in a bit of training and giving them sales collateral and all that sort of stuff. Although, in Jesse's case, they actually produce the sales collateral. We just give them guidance on it, but there'll be some investment of time and energy. But the simple fact of the matter is we're going to get a tremendous increase in the leveraging of our selling resources but without any commensurate increase in our operating and overhead costs.

Jesse: But you know, there'll be some time investment of time and energy. But the simple fact of the matter is we're going to get a tremendous increase, leveraging up of our selling resources, but without any commensurate increase in our operating and overhead costs. And as I say, outside the technological advances that we've made and the acquisitions that we've made, this is the most exciting thing that we've done for a long time.

Desmond Wheatley: And as I say, outside the technological advances that we made and the acquisitions that we've made, this is the most exciting thing that we've done for a long time.

Desmond Wheatley: And as I say, outside the technological advances that we've made and the acquisitions that we've made, this is the most exciting thing that we've done for a long time. Could you kind of sort of quantify it or just give some sense of the pace at which you would think you would be in a couple Jesse-like organizations as partners within a couple of years or faster than that, or does it take more time?

Desmond Wheatley: And that to some extent explains the increasing size of the pipeline without a rational increase in the size of the backlog. What does that mean? It means what I've been saying for these calls for many quarters. We are going to see this sort of lumpiness from our pipeline to backlog conversion point of view. And it is because, as I said, we, we, one single large federal order changes everything for us. Nobody's asking us these questions anymore. I'm confident that that will happen.

Desmond Wheatley: Could you kind of sort of quantify here or just give some sense of pace you would think you would be a couple Jesse like organizations as partners a couple a year or faster than that or takes more time. Sorry, are you talking about our ability to add those organizations, or are you talking about their ability to sell a Mr. No? I just meant like the agreement you find you, Jesse, to get to the next one. Is that a quick process, a small process? Look, I am going to be very careful not to add anybody to our ecosystem that doesn't do anything but a great job for us.

Speaker Change: Could you sort of quantify it or just give some sense of taste you would think you would be?

Speaker Change: couple Jesse like organizations as partners a couple a year or faster than that or takes more time?

Desmond Wheatley: Sorry, are you talking about our ability to add to those organizations? Are you talking about their ability to sell? I missed that. No, I just meant the agreement you signed with Jesse to get to the next one.

Speaker Change: Sorry, are you talking about our ability to add to those organizations? Are you talking about their ability to sell? I missed that. No, I just meant like the agreement you signed with Jesse to get to the next one, is that a quick process, a small process?

Desmond Wheatley: I am just not going to put a date on when it will happen because I don't control that at all.

Desmond Wheatley: Then the question becomes, okay, well, what are we doing as a management team to deal with that? We could sit with our face in our hands and say, oh, the feds have an ordered light we thought they were going to. Therefore, we're missing our numbers. Or we can take active and aggressive steps to broaden the funnel. And that's what we're doing. That's why you've seen this increase in commercial sales. That's why you've seen us move into large markets like Europe.

Desmond Wheatley: Is that a quick process, a slow process? Look, I'm going to be very careful not to add anybody to our ecosystem that doesn't do anything but a great job. So you'll see us taking a sober approach to this. But at the same time, you'll see an awful lot of effort going into it.

Speaker Change: Look, I'm going to be very careful not to add anybody to our ecosystem that doesn't do anything but a great job for us.

Desmond Wheatley: So you'll you'll see us taking a sober approach to this at the same time you'll see an awful lot of effort going into it in the, the, you know, this is really kind of a new thing for us getting the agreements in place and and understanding how we're going to do this. So you will see an awful lot of emphasis on it here in the next months and quarters, which so in a way it should be a sort of the reverse hockey stick where you see quite a lot of activity in the beginning. And then that should trail off as we feel that we've got sufficient entities in place that are, you know, within our capability of managing them and producing product for them.

Speaker Change: Thank you so much for joining us today, and I'm delighted to be here to talk to you a little bit about how we're going to do this. So you'll see us taking a sober approach to this. At the same time, you'll see an awful lot of effort going into it. And this is really kind of a new thing for us, getting the agreements in place and understanding how we're going to do this. So you will see an awful lot of emphasis on it here in the next months and quarters. And then that should trail off as we feel that we've got sufficient entities in place that are within our capability of managing them and producing product for them. But no, this is not a year's thing at all. In fact, I have given instructions to Sandra Peterson, who runs sales and marketing, that this is her number one priority.

Desmond Wheatley: This is really kind of a new thing for us, getting the agreements in place and understanding how we're going to do this. So you will see an awful lot of emphasis on it here in the next months and quarters. So, in a way, it should be a sort of the reverse hockey stick, where you see quite a lot of activity in the beginning, and then that should trail off as we feel that we've got sufficient entities in place that are within our capability of managing them and producing products for them. But no, this is not a year's thing at all.

Desmond Wheatley: That's why you see us bringing new products to market. And that's why you see us expanding our sales resources through the integration of the resellers, distributors, and sales agents. All of these moves are designed to increase the size of our funnel, diversify our revenue opportunities, and give us more ways to soak up any movement right from some of these large customers. I still believe that all of these sales will come. I think that we're, you know, this is a very uncertain year for all host of reasons as I pointed out before.

Desmond Wheatley: But no, this is not a years thing at all. In fact, I have given instructions to Sandra Peterson, who runs sales and marketing, that this is her number one priority: the recruitment of these types of entities to, to, to leverage up our selling. And again, remember, everything that we've ever reviewed has been sold by four or five people internally. I love our people. They're great. They do a great job. But lots of other people have great sales teams too. And I, I'm looking forward to having them out there telling our story.

Desmond Wheatley: In fact, I have given instructions to Sandra Peterson, who runs sales and marketing, that this is her number one priority, the recruitment of these types of entities to leverage up our selling. And again, remember, everything that we've ever made has been sold by four or five people internally. Listen, I love our people.

Desmond Wheatley: There's a great deal of uncertainty in the markets, a great deal of uncertain geopolitically. And then with the elections and everything else coming, we've gone uncertainty around that as well. That inevitably makes people less inclined to press the buy button. But again, we're not seeing any of this go away. So I think it's just, obviously, we were, as I said in my comments, we are constantly working on closing those big elephants.

Sandra Peterson: is the recruitment of these types of entities.

Sandra Peterson: And again, remember, everything that we've ever revenued has been sold by four or five people internally. Listen, I love our people. They're great. They do a great job. But lots of other people have great sales teams too, and I'm looking forward to having them out there telling our story.

Desmond Wheatley: But more importantly, strategically for us is making sure that we have a much wider funnel so that if something does move right, it's backfilled by something else coming in probably from a different corner of the planet for all we know.

Desmond Wheatley: They're great. They do a great job. But lots of other people have great sales teams, too.

Desmond Wheatley: And I'm looking forward to having them out there telling our story. I think we've got time for one more question. So, you beat me through it.

Operator: We have time for one more question. So you, you beat me through it. I'm just getting the signal here that we've got time for one more.

Desmond Wheatley: I'm just getting the signal here that we've got time for one more. The next question comes from Tate Sullivan from Maxim Group. Please go ahead. Hello, Jay.

Speaker Change: I think we've got time for one more question. You beat me through it. I'm just getting the signal here that we've got time for one more. The next question comes from Tate Sullivan from Maxim Group. Please go ahead.

Kate Sullivan: The next question comes from Kate Sullivan from Maxim Group. Please go ahead. Hello, too. Thank you. Hello. I'm just on the beam spot. Did I hear, is it? Are you planning to introduce it slash roll it out in both the US and Europe? Yes. That's what you said. Okay. Yes. Okay.

Operator: Thank you. Hello. Call up on the beam spot that I hear is it. Are you planning to introduce it slash roll it out in both the US and Europe? Yes. Yes. Okay. Actually, no. We should be able to introduce it in 24.

Tate Sullivan: Hello, Jay. Thank you, Jay. Hello. I'm just a follow-up. On the beam spot, did I hear, is it, are you planning to introduce it slash roll it out in both the U.S. and Europe?

Craig Irwin: The next question comes from Craig Irwin from Roth's Capitol. Please go ahead. I think I expect she, it's Andrew answer for Craig, but how are you? How are you? Good, good.

Desmond Wheatley: I actually know we should we should be able to introduce it in 24, but anticipate revenues from both markets in the in 25. Okay. And then you mentioned some sales for the legacy business for being Europe. Have you had a little down into their existing customers? Have you already imagined? Sorry. Yes, we are; we are definitely aggressively selling the existing customers, both the legacy and the new products. And, as I said in my comments, we have growth in the legacy business. We've been able to help them. They're very, very good at what they do, but they've operated their business entirely on a cash basis, as a typical of a sole proprietorship.

Speaker Change #100: Yes. Is that what you said? Okay. Yes. Okay. Actually, no. We should be able to introduce it in 24, but anticipate revenues from both markets in 25.

Tate Sullivan: But it's to anticipate revenues from both markets in 20. And then you mentioned some sales for the legacy business for Beam Europe. Have you had any success selling to their existing customers? Or have you already?

Desmond Wheatley: She kind of touched on this on the last question here, but I was wondering if you could provide some more detail on what's working so well on the commercial sales, which is kind of helping out smooth, smooth revenue recognition quarter by quarter? Yep. Yeah, I mean, Barbit's focus, as I said before, you'll remember, we used a very large proportion of our pie, although it was a much smaller pie in those days.

Speaker Change #101: Okay. And then you mentioned some sales for the legacy business for Beam Europe. Have you had a selling to their existing customers? Have you already? I imagine. Sorry if I missed that comment.

Desmond Wheatley: I imagine. Sorry. Yes, we are definitely aggressively selling to existing customers both the new and the new product. And as I said in my comments, we have growth in the legacy business. We've been able to help them, they're very, very good at what they do, but they've operated their business entirely on a cash basis as is typical of a sole proprietorship.

Speaker Change #102: Thank you.

Speaker Change #103: Yes, we are definitely aggressively selling to our existing customers, both the legacy and the new products.

Desmond Wheatley: It was commercial sales and then government took over from that COVID really shut down our commercial sales efforts. And inevitably our sales event ended up concentrating more on the places where they were going to make wins, which was government. Post COVID, we've seen a return to some of these sales on the EV chart inside of business, but we're also bringing revenue from other interesting spots where commercial is concerned. It's not all coming from the EV charting products.

Speaker Change #103: And as I said in my comments...

Speaker Change #103: We have growth in the legacy business.

Speaker Change #104: We've been able to help them. They're very, very good at what they do, but they've operated their business entirely on a cash basis, as a typical of a sole proprietorship. And so we have actually been able to help them leverage up the business a little bit in terms of, you know, having the right types of inventory on hand to be able to execute faster on deployments and that sort of stuff. So we've seen growth in the legacy business. We expect to continue to see that. We're going to go after that more aggressively than ever because it is a perfect lead-in.

Desmond Wheatley: And so we have actually been able to help them leverage up the business a little bit in terms of, you know, having the right types of inventory on hand to be able to execute faster on deployments and that sort of stuff. So we've seen growth in the legacy business. We expect to continue to see that.

Desmond Wheatley: And so we have actually been able to help them leverage the business a little bit in terms of having the right types of inventory on hand to be able to execute faster on deployments and that sort of stuff. And so we've seen growth in the legacy business. We expect to continue to see that. We're going to go after that more aggressively than ever because it is a perfect lead-in for all the other products that we're going to sell them, but also because we can do it. Thank you, Desmond. Thanks, kid.

Desmond Wheatley: We're going to go after that more aggressively than ever because it is a perfect lead-in for all the other products that we're going to sell them, but also because we can do it comfortably. Thank you.

Desmond Wheatley: We are seeing a tremendous return to sales of those types of products into commercial, but also contributions from battery sales. And to some extent, the legacy business from being global, although a beam Europe, although a lot of that is also a government based in that we're selling street furniture to municipalities and other government agencies. So it's some of its focus, some of it's just the natural impact of the market. And then a big part of it from an EV charting point of view is commercial real estate really didn't care about EV charting until a year ago even, because it doesn't impact their lease-up times or their tenant retention.

Speaker Change #104: For all the other products that we're going to sell them but also because we can do it profitably

Operator: This concludes our question and answer session. I would like to turn the conference back over to Desmond Wheatley for closing remarks. Okay, thank you very much.

Devin: Thank you, Devin.

Desmond Wheatley: Thank you, Desmond. Thank you very much. Thanks for the question. If we didn't get to you, please feel free to call directly or email us, or whatever else. And I know I follow up calls with most analysts after this. So don't worry if you had a question. We didn't get any questions.

Devin: Thank you.

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

Desmond Wheatley: And thanks for the excellent questions. If we didn't get to you, feel free to call us directly or email us or, or whatever else. And I know I have follow-up calls with most analysts after this. So don't don't worry; if you had a question, we didn't get to it. Look, I think that the main thing that you know, aside from all the excellent stuff that we're doing, the main thing that we all focus on here today was the increasing pipeline without a backlog being there. I knew that would raise eyebrows. As I said, I'm confident that we're going to make that conversion. It is kind of a weird year.

Desmond Wheatley: But as we see more and more EVs on the road, we're going to see much more interest on the part of commercial real estate and EV charting. In my opinion, it will become like Wi-Fi. You will not be able to operate a piece of property that as a commercial aspect to it without offering EV charting. And as that happens, we're going to see a lot of increase in demand for EV charging in general.

Desmond Wheatley: Okay, thank you very much and thanks for the excellent questions. If we didn't get to you, please feel free to call us directly or email us or whatever else. And I know I have follow-up calls with most analysts.

Desmond Wheatley: And we in particular, I believe we'll see a lot of increase in demand because most pieces of commercial properties simply don't have sufficient electric circuits and certainly don't want to be digging up their parking lots and their landscaping and everything like that for months on end to provide it in a way that government entities might be more insensitive to. So all of those things lend themselves very much to growth for us in that space.

Speaker Change #106: the management team here, in fact the entire team at Bean Global is taking all the active and aggressive steps that we need to take to broaden our Funnel, and that's going to pay off for us. It's already paying off for us. The orders that we're seeing

Desmond Wheatley: I think that the main thing that the size of all the excellence stuff that we're doing, the main thing that we all focus on here today was that increasing pipeline without a backlog being there. I knew that would raise eyebrows. As I said, I'm confident that we're going to make that conversion. It is a kind of a weird year, but everything's telling me things are moving right, not going away. And again, the management team here, in fact, the entire team at Beam Global, is taking all the active and aggressive steps that we need to take to broaden our funnel.

Desmond Wheatley: But everything's telling me things are moving right, not going away. And again, the management team here, in fact, the entire Being global team, is taking all the active and aggressive steps that we need to take to broaden our funnel. And that's going to pay off for us. It's already paying off for us. The orders that we're seeing for the MOD deployments, that would not have happened had we not made that effort to broaden our geographic reach there.

Desmond Wheatley: And that's going to pay off for us. It's already paying for paying off for us the orders that we're seeing, the deployments for the MOD that would not have happened, had we not made that effort to broaden our geographic reach there. The order that we received from Jesse would not have happened if we hadn't made those efforts. And so the efforts are paying off, and they're going to continue to do so. I don't believe that we're talking about dividing into the same size pi here. I think that these will all be accreted to what we're doing.

Craig Irwin: And while we're happy with the increasing commercial business that we've done, that jobs know we're near finished. And I've always said, always, even at the times when government revenues were almost 100% of our revenues, I've always said that in the end, this will be a consumer and commercial led deal and the great majority of being global's revenues will come from consumer and commercial, although not at the expense of absolute dollars from government, but from a percentage point. So do you. Great, thanks for the color there.

Aaltofeit Soukshania: and our celebratory guest, Aaltofeit Soukshania. Please, Little island is certainly not a sport, not legally though. She also speaks for herself when she is upstanding and practicing in the mountain country community.

Desmond Wheatley: The order that we received from Jesse would not have happened if we hadn't made those efforts. And so the efforts are paying off, and they're going to continue to do so. These will, I don't believe that we're talking about dividing into the same-sized pie here.

Aaltofeit Soukshania: The efforts are paying off and they're going to continue to do so. These will, I don't believe that we're talking about dividing into the same size pie here, I think that these will all be accreted to what we're doing and yes we've seen a bit of lumpiness, we're going to, but the general trend is onward and upwards and at the same time we're taking very active and aggressive steps to make sure that we are firing as many appropriate targets as possible.

Desmond Wheatley: I think that these will all be accreted to what we're doing. And yes, we've seen a bit of lumpiness. We will. But the general trend is onward and upward. And at the same time, we're taking very active and aggressive steps to make sure that we are firing as many appropriate targets as possible. So bear with us on that.

Desmond Wheatley: And yes, we've seen a bit of lumpiness. We're going to. But the general trend is onward and upwards. And at the same time, we're taking very active and aggressive steps to make sure that we are firing as many appropriate targets as possible. So bear with us on that.

Desmond Wheatley: My second question was great to see, you know, second straight quarter of very strong gross margins, you really did a great job parsing out the details there on the call. First off, the two-parter. One, I guess, how much of the backlog do we have to burn through to see the price increases impact gross margins? And secondly, you talked a bit about the European manufacturing hypothetically, building the base, base plates in the EU to two to three percent gross margin improvement there is that kind of what, what will drive the further increases after you get to, you know, double the one queue levels that you talked about.

Desmond Wheatley: As I said, I'm very comfortable that our best days are ahead of us, and we're a far better company than we've ever been in our history. One other thing that we have not talked about, just very briefly, as we're coming at the end of our ERP integration, that's been a major job of work for us here. But it's also been very helpful in terms of our getting access to the numbers and being able to do good analysis on the business.

Desmond Wheatley: I am, as I said, I'm very comfortable. Our best days are ahead of us, and we're far better company than we've ever been in our history.

Aaltofeit Soukshania: So, bear with us on that.

Aaltofeit Soukshania: As I said, I'm very comfortable our best days are ahead of us, and we're a far better company than we've ever been in our history.

Desmond Wheatley: And one other thing that we have not talked about just very briefly is we're coming to the end of our ERP integration. That's been a major job of work for us here. But it's also being very helpful in terms of our getting access to the numbers and being able to do good analysis on the business. And these things also contribute to our margin improvements because we know where to target, and we're getting better and better things.

Aaltofeit Soukshania: And one other thing that we have not talked about just very briefly is we're coming at the end of our ERP integration. That's been a major job of work for us here, but it's also been very helpful in terms of our getting access to the numbers and being able to do good analysis on the business. And these things also contribute to our margin improvements.

Desmond Wheatley: And these things also contribute to our margin improvements because we know where to target, and we're getting better and better at things. And as a final comment, I'll just put a quick shout out to Lisa Potok and our team, because here we are filing a couple of days before we have to, in contrast to our full year and first quarter, when, as you know, we used our extension. We weren't late, but we used our extensions.

Desmond Wheatley: And as a final comment, I'll just put a quick shout-out to Lisa Bochak and our team because here we are filing a couple of days before we have to. In contrast to the full year and verse quarter, when, as you know, we used our extension, we weren't late, but we used our extensions. But for those of you that were worried that that was a chronic condition, Lisa's got things under control, and we are here; we are a couple of days in advance. So thank you for that, Lisa.

Speaker Change #108: because we know where to target and we're getting better and better at things. And as a final comment, I'll just put a quick shout out to Lisa Potok and our team because here we are filing a couple of days before we have to, in contrast to our full year in verse quarter when, as you know, we used our extension. We weren't late, but we used our extensions. But for those of you that were worried that that was a chronic condition, Lisa's got things under control and here we are a couple of days in advance of time. So thank you for that, Lisa. And thanks lastly to the entire BEAM team and to everybody that supports us.

Desmond Wheatley: Yes, so first thing to point out is actually about 20% of our Q2 EVR sales did have the increased price, so that did contribute. Only a fifth of them, but that did contribute and we are rapidly coming to the end of that pre of that backlog that we had, there's a few stragglers left over so the majority moving forward will include the price increase. So we should benefit from that inevitably there's a, I don't have the exact number of what the units we've got left in backlog at the pre pricing, and I will say there's a couple of our larger contracts.

Desmond Wheatley: But for those of you that were worried that that was a chronic condition, Lisa's got things under control, and here we are a couple of days in advance of time. So thank you for that, Lisa. And thanks, lastly, to the entire BEAM team and to everybody that supports us. I love this company, and I'm more enthusiastic than ever. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Desmond Wheatley: And thanks lastly to the entire beam team and to everybody that supports us. I love this company, and I'm more enthusiastic than ever. Thank you.

Speaker Change #108: I love this company and I'm more enthusiastic than ever. Thank you.

Operator: The conference is now concluded. Thank you for attending today's presentation.

Desmond Wheatley: The GSA type contracts and also California DGS contract. We're not, it's harder for us to integrate that new pricing into them. That's a longer process and we will not turn down sales from them in the meantime. So that could, that could create some stragglers where that's concerned as well, but moving forward in general, we're moving into this new pricing structure and we expect that to be beneficial on these savings from, from Europe.

Operator: You may now disconnect.

Speaker Change #109: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Desmond Wheatley: It's way beyond theoretical now. This, or hypothetical, I think is the word to use. It's, it's actual. We actually know could we've done it that we can produce the base prize. In particular, this one item, which has to be very expensive part of the EV Arches. It's the, it's the, the ballast and traction pad, which gives the system its stability in a parking space. We know for a fact that we can produce those something like, I don't know, six or eight percent lower price impact on our cogs on our bomb, the bomb aspect of our cogs.

Desmond Wheatley: But even after shipping them to us across the sea in a container, of course, you can put quite a few of them in a container. We can still pick up this two to three percent gross or cogs reduction gross margin improvement in the US with manufacturing and shipping from, from our European facilities. Now, a couple of things come from that. First of all, we're going to do a lot more of that.

Desmond Wheatley: We're going to identify more pieces and parts that we can manufacture in our serving facilities. While we have 50,000 square feet under roof here in the US, we've got 250,000 square feet under roof and acres of land upon which we can inexpensively expand in our credible facilities. So we've got a lot of tremendous amount of room for expansion there. One of the things I actually like about this is the extent that we can pull some of those requirements out of this 50,000 square foot facility in the US.

Desmond Wheatley: Well, that does that allow us else more opportunity for expansion in this facility without having to expand elsewhere to do that, because we can reduce the number of tasks that are taking place here. But the ones that we can do inexpensively into our European facilities and then just concentrate on aspects of the manufacturing and assembly that should happen in this facility. So what's the benefits will come from that, but it's far from hypothetical.

Desmond Wheatley: The cost of the savings are already coming into effect and we will start receiving the first of those balance and traction pads in the fourth quarter with that reduction in cost again attached to it. So nothing but good news coming from that and not hypothetical actual. Perfect. Well, that's great to hear. Congrats on that continued progress.

Craig Irwin: And I'll hop back in the queue. Thank you very much.

Ryan: The next question comes from Ryan at B Riley. Please go ahead. Hey, Desmond. Thanks for I think. I'll stick with the margins and congrats on the improvement again, this quarter. Wondering what are the additional levers you can pull to enhance margins further beyond the price increases and international manufacturing capacity as we look to next year and 26. Is it mostly scale or are there other areas that you're looking at? Yeah, so there's no no question about scale, no question of volume helps us.

Ryan: And again, I know there, I know there would be good to go back to our previous question about the mix between pipeline and backlog. I know that that's going to raise some eyebrows and maybe even concern, but I'm not worried about that. I think we as I said, I know what these what these orders look like. I'm personally I'm confident that this is moving right, not not going away. And so I think we get that return and increase in volume.

Ryan: That will definitely help us beyond that. We still have elements engineering and an operational improvement, which we still haven't fully benefited from yet. I think we're going to see further benefits from our activities in Europe. And then the truth is you get to remember that we are we've been operating in what for us has been a hyper hyper inflationary environment. I think I don't quote me on this, but or if you want to quote me double check on this, but I think we've seen something north of 30% increase in the prices that we have paid for our bomb since the beginning of the inflationary period back in in COVID, 30%.

Ryan: And if you think about that, what that means is we have absorbed all of those costs and yet brought our growth profit to 16% gap 18% net of non cash items, which is an amortization of intangible asset value, resulting from our battery company deal. So we essentially we've absorbed the 30% increasing costs and and and we're a bomb heavy company. Labor is a low part of the contribution to our hard deal.

Ryan: So absorbed 30% of absorbed 30% increase in cost due to inflation and yet brought our growth profitability from minus 15% to positive 15% in the at the same time, which is basically like a 60% improvement in cost reduction. When you combine those two things, we've still got more to do. We're getting better better and better at this engineering improvements operational improvements. And then the fact that we are now starting to see stabilization in in price of components and even reductions in price of components that we integrate chief amongst those we've got but would be battery cells.

Ryan: Battery cells dropped precipitously for the first 10 or so years that we made the product. We thought that was going to continue without stopping. But then when COVID came along, battery cells turned around and started getting more expensive again. We had to absorb all of that. Remember, we never increased our prices during any of this until this latest price increase, which we which I've expanded on enough for everybody to hear about it.

Ryan: So we are there's a combination of things going on larger market forces at work, but also are just most of it's going to come from our own improvements. The frankly, the other thing that's really cool is we're learning from our Europeans. The truth is they have been doing what we have been doing in this building for last two or four years. They've been doing for 30 years. They're really good at it. It's just been a great combination, frankly. And so between all of us, we're going to continue to drive the price of down. And I think we've still got a lot further to go.

Desmond Wheatley: I have said in the past that my goal is to get the 50% growth profit, and I'm standing by that goal. Great. I really appreciate that additional color. For my follow-up on the beam spot, what are the final boxes to check before that hits the market? And when do you see that ramping to the point where it becomes a meaningful portion of the overall salesmex? That's a sort of question that I ask around here and I do, except you did it without expletives.

Desmond Wheatley: It brings in your product to market, particularly a quite large and complex piece of equipment is always challenging and nothing, nothing ever happens as fast as I wanted to. However, as I said in the call in my comments, I absolutely report to you that our team in Chicago has now done the integration of the components into the into the call of the beam spot and that we are in fact doing what we need to do in San Diego to be able to to stand the first of those up.

Desmond Wheatley: We're going to do the same thing in our European facilities and those will, the great thing that they will do is they will give us something real that we can show to people and we intend to do that. It's one of the big reasons that we selected San Diego over Chicago to do the first installations because we've got a lot of people that we're going to bring by here and I actually show them the system in operation, charting a car, doing what it needs to do.

Desmond Wheatley: I anticipate a couple of things. The first one is the first prototype systems that we put out will not be anywhere near as good as those that we take to market. We've already learned a lot in the first them together. Our engineering team is fantastic. They model everything out. Everything happens on computer screens before we touch enemy physical but inevitably when we start making them we find ways to make them better and less expensive and more efficient and everything else.

Desmond Wheatley: I just as we have done with EV arc. We're about to do that with EV standard as well but that will not stop us selling it. The sales cycle we anticipate will be slightly longer with EV standard than it is in many cases with EV arc because we think that the unit sales will be larger and it will be more of a large-scale infrastructure deployment than one Z2 Z sales. Although as I think I said last time, I'm starting to rethink that a little bit because we do now think that there's a lot of opportunity for these in parking lots of shopping malls and places like that where maybe they would buy one or two or three or four of them and that sales cycle could be a lot shorter than the benefits of them are tremendous, highly visible, rapidly deployed and all the other things that go along with it.

Desmond Wheatley: But our plan right now is to get the first prototype stood up operating and then we will start to really aggressively market them here and still within this year and then I think we anticipate that we'll start to see the first meaningful revenue from them into 25. Great. Appreciate it. That's what I'll turn it back. Thank you.

Noel Parks: The next question comes from Noel Parks from Kerry Brothers. Please go ahead. I know. Hi. How you doing? Okay. I've got some jets flying over. Just give me a second here. No problem. Merrima flight fast. I'm on. Sure. I think that that sounds like the last of them disappearing over the horizon. Okay. Sorry. No good. Life on the road. I hear you.

Desmond Wheatley: You know, I'm just thinking about the terms of your sales and marketing organization and you mentioned larger sales can be more stakeholders, less certainty of timing. And you know, I go shift internal classes things that really, you know, tenders is generally able to control, you know, within a customer. Or do you feel it from the inside? Do you have the resources to move customers along as fast as you as you can?

Desmond Wheatley: And we are, of course, there are class considerations there about, you know, the first month, and then moving it along, the hand holding and the closing and everything. So just, you know, where do you feel like those are in balance, what you need and what you can accomplish with them just moving customers along?

Desmond Wheatley: Yes, so I don't think they're in balance and that's why we're making the changes that we're making but let me come back to that. The new selling resources that we're engaging will not do anything to move our existing backlog along or convert our existing pipeline into backlog. That's not their purpose at all. Our current sale seems done a fine job of that. Our current sale seems responsible for everything in the $185 million or whatever pipeline that we have right now, and for all the revenue that we've ever generated.

Desmond Wheatley: What's actually happened, and I actually view this to be one of the most important aspects of our business today as I'm talking to you. What's happened is we've talked for many years about engaging with resellers and distributors and agents, and in the past, our own processes, our own sales collateral, our own ability to understand the selling cycle and everything else has not been mature enough to actively engage outside resources, because frankly, we were talking about kind of learning as well while we're going along.

Desmond Wheatley: What's changed is that we now are confident in the products being developing and changing and everything else, right? But what's changed is that we are now a point where we're confident enough in the product development. We are confident enough in our understanding of the sale cycle, the types of customers that people are going after. And we are also confident enough in the develops and sales collateral to where we can finally start to engage outside selling resources.

Desmond Wheatley: And the reason I'm so excited about this is because again, go back to what I just said, our internal sales team of four or five people has sold everything that we've ever revenue. Imagine how it's going to be when we've got 50 or 100 similar people around the world telling the same story to the same type of customer prospects that our internal salespeople can't get to because there aren't enough hours in the data.

Desmond Wheatley: You just can't make that many phone calls. You know, the 380 million people in the United States of America, how many of them can five salespeople call, right? And as we look at Europe and those other markets, and this was really what precipitated us starring in Europe with Jesse, is different to the United States in that while the EU in particular is one economic block, it's still very culturally different border to border.

Desmond Wheatley: Frenchmen are not the same as Germans are not the same as Spaniards are not the same as Maltese. It's as simple as that and I've no doubt I'll get letters for making nationalist distinctions or something here, but I'm sure you understand what I'm talking about. And so what we're determined to do is to find people in those environments. Jesse of course covers Spain, Portugal and the Spanish speaking Caribbean because they're already there.

Desmond Wheatley: They're culturally and linguistically very aligned and they're already doing business there and they have all the relationships there and everything else. Furthermore, I've known Jesse for years. I've been engaged with him for years and know them to be well connected and a well-organizing and good platform. There are several other entities just like Jesse out there. And look at what Jesse's done. We signed a distributor agreement with him and we already have an order from them.

Desmond Wheatley: This is just a fantastic time for us to multiply up our sales teams efforts, not impacting current pipeline, not impacting current revenues, adding tremendously to the pipeline. That's my plan, that's my intention and that is my expectation. Converting that pipeline to backlog and doing all of it without adding to our SG&A costs. So we will not have an increase in operating costs. We will have no increase in cash burden or anything else, but we will have a tremendous increase in resources out there selling our products.

Desmond Wheatley: And those resources, by the way, get paid when and only when we successfully collect from our customers for the products that they sell. So it's a very low risk. Yeah, we'll have to invest something in a bit of training and giving them sales collateral and all that sort of stuff. Although in Jesse's case, they actually produce the sales collateral. We just give them the guidance on it. But there will be some time investment of time and energy, but the simple part of the matter is we're going to get a tremendous increase, leveraging up of our selling resources, but without any commensurate increase in our operating and overhead costs.

Desmond Wheatley: And as I say, outside the technological advances that we made and the acquisitions that we've made, this is the most exciting thing that we've done for a long time.

Desmond Wheatley: Could you kind of sort of quantify here or just give some sense of pace you would think you would be a couple Jesse like organizations as partners a couple a year or faster than that or takes more time. Sorry, are you talking about our ability to add those organizations or are you talking about their ability to sell a Mr. No, I just meant like the agreement you find you Jesse to to get to the next one is that is that a quick process, a small process.

Desmond Wheatley: Look, I'm going to be very careful not to add anybody to our ecosystem that doesn't do anything but a great job for us. So you'll you'll see us taking a sober approach to this at the same time you'll see an awful lot of effort going into it in the, the, you know, this is really kind of a new thing for us getting the agreements in place and and understanding how we're going to do this.

Desmond Wheatley: So you will see an awful of emphasis on it here in the next months and quarters, which so in a way it should be a sort of the reverse hockey stick where you see quite a lot of activity in the beginning. And then that should trail off as we feel that we've got sufficient entities in place that are, you know, within our capability of managing them and producing product for them.

Desmond Wheatley: But no, this is not a years thing at all. In fact, I have given instructions to Sandra Peterson, who runs sales and marketing that this is her number one priority is the recruitment of these types of entities to, to, to leverage up our selling. And again, remember, everything that we've ever reviewed has been sold by four or five people internally. I love our people. They're great. They do a great job. But lots of other people have great sales teams too. And I, I'm looking forward to having them out there telling our story.

Kate Sullivan: We have time for one more question. So you, you beat me through it. I'm just getting the signal here that we've got time for one more. The next question comes from Kate Sullivan from Maxim Group. Please go ahead. Hello, too. Thank you. Hello. I'm just on the beam spot. Did I hear is it? Are you planning to introduce it slash roll it out in both the US and Europe? Yes. That's what you said. Okay. Yes. Okay. I actually know we should we should be able to introduce it in 24, but anticipate revenues from both markets in the in 25. Okay.

Desmond Wheatley: And then you mentioned some sales for the legacy business for being Europe. Have you had a little down into their existing customers? Have you already imagined? Sorry. Yes, we are, we are definitely aggressively selling the existing customers are the new, both the legacy and the new products. And as I said in my comments, we have growth in the legacy business. We've been able to help them. They're very, very good at what they do, but they've operated their business entirely on a cash basis as a typical of a sole proprietorship.

Desmond Wheatley: And so we have actually been able to help them leverage up the business a little bit in terms of, you know, having the right types of inventory on hand to be able to execute faster on deployments and that sort of stuff. So we've seen growth in the legacy business. We expect to continue to see that. We're going to go after that more aggressively than ever because it is a perfect lead in for all the other products that we're going to sell them, but also because we can do it comfortably.

Kate Sullivan: Thank you. Thank you, Desmond. Thank you very much. Thanks for the question.

Desmond Wheatley: If we didn't get to you, please feel free to call directly or email us or whatever else. And I know I follow up calls with most analysts after this. So don't worry if you had a question. We didn't get any questions.

Desmond Wheatley: I think that the main thing that the size of all the excellence stuff that we're doing, the main thing that we all focus on here today was that increasing pipeline without a backlog being there. I knew that would raise eyebrows. As I said, I'm confident that we're going to make that conversion. It is a kind of a weird year, but everything's telling me things are moving right not going away. And again, the management team here in fact, the entire team at Beam Global is taking all the active and aggressive steps that we need to take to broaden our funnel.

Desmond Wheatley: And that's going to pay off for us. It's already paying for paying off for us the orders that we're seeing, the deployments for the MOD that would not have happened, had we not made that effort to broaden our geographic reach there. The order that we received from Jesse would not have happened if we hadn't made those efforts. And so the efforts are paying off and they're going to continue to do so.

Desmond Wheatley: I don't believe that we're talking about dividing into the same size pi here. I think that these will all be accreted to what we're doing. And yes, we've seen a bit of lumpiness. We're going to. But the general trend is onward and upwards. And at the same time, we're taking very active and aggressive steps to make sure that we are firing as many appropriate targets as possible. So bear with us on that.

Desmond Wheatley: I am, as I said, I'm very comfortable our best days are ahead of us and we're far better company than we've ever been in our history. And one other thing that we have not talked about just very briefly is we're coming to the end of our ERP integration. That's been a major job of work for us here. But it's also being very helpful in terms of our getting access to the numbers and being able to do good analysis on the business. And these things also contribute to our margin improvements because we know where to target and we're getting better and better things.

Desmond Wheatley: And as a final comment, I'll just put a quick shout out to Lisa Bochak and our team because here we are filing a couple of days before we have to. In contrast to the full year and verse quarter, when as you know, we used our extension, we weren't late, but we used our extensions. But for those of you that were worried that that was a chronic condition, Lisa's got things on the control and we are here, we are a couple of days in advance. So thank you for that Lisa. And thanks lastly to the entire beam team and to everybody that supports us. I love this company and I'm more enthusiastic than ever.

Desmond Wheatley: Thank you.

Operator: The conference is now concluded. Thank you for attending today's presentation.

Operator: You may now disconnect.