BEAM GLOBAL OVERVIEW:
Beam develops, manufactures and sells high-quality, renewably energized infrastructure products for electric vehicle charging infrastructure, energy storage, energy security, disaster preparedness and outdoor media advertising.
The Company has designed five product lines that incorporate our proprietary technology for producing a unique alternative to grid-tied charging, having a built-in renewable energy source in the form of attached solar panels and/or light wind generator to produce power and battery storage to store the power. These products are rapidly deployable and attractively designed. Our product lines include:
- EV ARC™ Electric Vehicle Autonomous Renewable Charger - a patented,
rapidly deployed, infrastructure product that uses integrated solar
power and battery storage to provide a mounting asset and a source of
power for factory installed electric vehicle charging stations of any
brand. The electronics are elevated to the underside of the solar array
making the unit flood-proof up to nine and a half feet and allowing
adequate space to park a vehicle on the engineered ballast and traction
pad which gives the product stability.
- Solar Tree® DCFC - Off-grid, renewably energized and rapidly deployed,
patented single-column mounted smart generation and energy storage
system with the capability to provide a 150kW DC fast charge to one or
more electric vehicles or larger vehicles.
- EV ARC™ DCFC - DC Fast Charging system for charging EVs comprised of
four interconnected EV ARC™ systems and a 50kW DC fast charger.
- EV-StandardTM - patent issued on December 31, 2019 and currently under
development. A lamp standard, EV charging and emergency power product
which uses an existing streetlamp's foundation and a combination of
solar, wind, grid connection and onboard energy storage to provide
curbside charging.
- UAV ARC™ - patent issued on November 24, 2020 and still under
development. An off-grid, renewably energized and rapidly deployed
product and network used to charge aerial drone (UAV) fleets.
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In addition, with the acquisition of
We believe that there is a clear need for a rapidly deployable and highly scalable EV charging infrastructure, and that our products fulfill that requirement. Unlike grid-tied installations which require general and electrical contractors, engineers, consultants, digging trenches, permitting, pouring concrete, wiring, and ongoing utility bills, the EV ARC™ system can be deployed in minutes, not months, and is powered by renewable energy so there is no utility bill. We are agnostic as to the EV charging service equipment or provider and integrate best of breed solutions based upon our customer's requirements. For example, our EV ARC™ and Solar Tree® products have been deployed with Chargepoint, Blink, Enel X, Electrify America and other high quality EV charging solutions. We can make recommendations to customers, or we can comply with their specifications and/or existing charger networks. Our products replace the infrastructure required to support EV chargers, not the chargers themselves. We do not sell EV charging, rather we sell products which enable it.
We believe our chief differentiators for our electric vehicle charging infrastructure products are:
· our patented, renewable energy products dramatically reduce the cost,
time and complexity of the installation and operation of EV charging
infrastructure and outdoor media platforms when compared to
traditional, utility grid tied alternatives;
· our proprietary and patented energy solutions;
· our first-to-market advantage with EV charging infrastructure products
which are renewably energized, rapidly deployed and require no
construction or electrical work on site;
· our products' capability to operate during grid outages and to provide
a source of EV charging and emergency power rather than becoming
inoperable during times of emergency or other grid interruptions; and
· our ability to continuously create new and patentable inventions which
are marketable and a complex integration of our proprietary technology
and parts, and other commonly available engineered components, which
create a further barrier to entry for our competition.
Our revenues increased from
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We continued to made progress in finding a sponsor for our outdoor media
advertising business during 2022, working with
We have begun development on our newest patented products - our EV Standard™ and UAV ARC™, which we expect will expand our product offerings with the same proprietary technology as our current products and allow us to expand into new markets.
Several contributing factors resulted in reporting a gross loss in both 2022 and
2021. We currently have a fixed overhead structure and facility that is
underutilized but will support our expected growth over the next several years.
As our revenues continue to increase, and we increase our production volumes, we
will continue to increase our fixed overhead absorption which reduces our fixed
overhead cost allocation per unit, as well as benefit from improved labor
efficiencies and utilization and cost improvements by negotiating volume
purchase discounts. We are also implementing lean manufacturing process
improvements and making engineering changes to our product which we believe will
result in further cost reductions. Many of the components that we integrate into
our products are manufactured by others. This is consistent with our strategy to
take advantage of the investment by large and well-funded organizations in the
improvement of various components and sub-assemblies which we integrate into our
final product. We experienced cost increases on many of our components during
2021 and 2022, most notably our steel cost, which were brought on by supply
chain issues resulting from plant closures and staffing shortages during the
Covid-19 pandemic. In late 2022, we started to see these increases flatten out
and some are starting to decrease, and we expect to see a reduction in the cost
of our bill of materials. Batteries are the highest cost contributor to our bill
of materials, but with the
Critical Accounting Policies
Please refer to Note 1 in the financial statements for further information on the Company's critical accounting policies which are summarized as follows:
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Business Combination. The purchase price of an acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets assumed, such excess is allocated to goodwill. The Company determines the estimated fair values after review and consideration of relevant information, including discounted cash flows and estimates made by management. The Company records the net assets and results of operations of an acquired entity from the acquisition date. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred.
Contingent consideration liability is recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent consideration liability are recognized in operating expenses in the statement of operations. Contingent consideration liability related to the acquisition consists of commercial milestone payments and are valued using a Monte Carlo simulation. The fair value of commercial milestone payments reflects management's estimates of discount rates and probability of achieving certain milestones. Changes in the fair value of contingent consideration subsequent to the acquisition date are recognized in operating expense in our consolidated statements of operations.
Inventory. Inventory is stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method of accounting. Inventory costs primarily relate to purchased raw materials and components used in the manufacturing of our products, work in process for products being manufactured, and finished goods. Included in these costs are direct labor and certain manufacturing overhead costs associated with normal capacity in the manufacturing process. The Company regularly reviews inventory components and quantities on hand and performs annual physical inventory counts.
Impairment of Long-lived Assets. The Company accounts for long-lived assets in accordance with the provisions of Accounting Standards Codification ("ASC") 360-10-35-15 "Impairment or Disposal of Long-Lived Assets," which requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
Revenue Recognition.Beam follows the revenue standards of Financial Accounting Standards Board Update No. 2014-09: "Revenue from Contracts with Customers (Topic 606)." The core principle of this Topic is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is recognized in accordance with that core principle by applying the following five steps: 1) identify the contracts with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) we satisfy a performance obligation.
Revenues are primarily derived from the direct sales of manufactured products. Revenues may also consist of maintenance fees for the maintenance of previously sold products and revenues from sales of professional services.
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Revenues from inventoried product are recognized upon the final delivery of such product to the customer or when legal transfer of ownership takes place. Revenue values are fixed price arrangements determined at the time an order is placed or a contract is entered into. The customer is typically obligated to make payment for such products within a 30-45 day period after delivery.
Revenues from maintenance fees for services provided by the Company are recognized equally over the period of the maintenance term. Revenue values are fixed price arrangements determined at the time an order is placed or a contract is entered into. The customer is typically obligated to make payment for the service in advance of the maintenance period.
Extended maintenance or warranty services, where the customer has the option to purchase this extension as a separate purchase option, are considered a separate performance obligation. If the Company does not control the extended services, in terms of having the responsibility for fulfillment of the obligation or the option to choose who will perform the services, the Company is acting as an agent and would report the revenues on a net basis.
Revenues from professional services for relocations, charger replacements or out of warranty repairs are recognized as services are performed. Revenue values are based upon fixed fee arrangements or hourly fee-based arrangements with agreed to hourly rates of service categories in line with expertise requirements. These services are billed to a customer as such services are provided and the customer will be obligated to make payments for such services typically within a 30-45 day period.
The Company has a policy of recording sales incentives as a contra revenue.
The Company includes shipping and handling fees billed to customers as revenues and shipping and handling costs as cost of revenues.
Any deposits received from a customer prior to delivery of the purchased product or monies paid prior to the period for which a service is provided are accounted for as deferred revenue on the balance sheet.
Sales tax is recorded on a net basis and excluded from revenue.
The Company generally provides a standard one-year warranty on its EV charging infrastructure products for materials and workmanship but may provide multiple year warranties as negotiated, and it will pass on the warranties from its vendors, if any, which generally covers this one-year period. The Company accrues for product warranties when the loss is probable and can be reasonably estimated.
Cost of Revenues. The Company records direct material and component costs, direct labor and associated benefits, and manufacturing overhead costs such as supervision, manufacturing equipment depreciation, rent, and utility costs, which are included in inventory prior to a sale, as cost of revenues. The Company further includes shipping and handling fees billed to customers as revenues and shipping and handling costs as cost of revenues.
Share-Based Compensation. We measure and recognize compensation expense for all share-based payments based on estimated fair value. Share-based compensation expense is recognized based on the fair value on a straight-line basis over the requisite service periods of the awards. The fair value of our restricted stock and performance stock units is based on the market price of our common stock on the date of grant. The determination of the amount of share-based compensation expense for our performance stock units requires the use of certain estimates and assumptions that affect the amount of share-based compensation expense recognized in our consolidated statements of operations. At each reported period, we reassess the probability of the achievement of corporate performance goals to estimate the amount of shares to be released. Any increase or decrease in share-based compensation expense resulting from an adjustment in the estimated shares to be released is treated as a cumulative catch-up in the period of adjustment. If any of the assumptions or estimates used change significantly, share-based compensation expense may differ materially from what we have recorded in the current period.
28 Results of Operations
Comparison of Results of Operations for Fiscal Years Ended
Revenues. For the year ended
Gross Loss. For the year ended
Operating Expenses. Total operating expenses were
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Liquidity and Capital Resources
At
Our cash flows from operating, investing and financing activities, as reflected in the statements of cash flows, are summarized in the table below:
December 31,
2,022 2021
Cash provided by (used in):
Net cash used in operating activities $ (18,114 ) $ (6,408 )
Net cash used in investing activities $ (1,812 ) $ (582 ) Net cash (used in) provided by financing activities
For the year ended
Our operating activities resulted in cash used in operations of
Cash used in investing activities in the year ended
In 2022, cash generated by our financing activities included
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Current assets decreased to
The Company has been focused on marketing and sales efforts to increase our revenues. Revenues increased by 45% from 2020 to 2021 and 144% from 2021 to 2022, demonstrating that this investment has been successful. While the Company has still not earned a gross profit on its sale of products, gross profit has improved even during an inflationary period, and as revenues increase, we expect to see our fixed overhead costs spread over more units, which will reduce the cost per unit. Management has made several design changes and process improvements in our manufacturing operations in 2021 and 2022 which has helped to increase labor efficiency and reduce costs. At the same time, supply chain issues related to the COVID-19 virus have caused an increase in certain of our material costs, most notably in steel purchases. However, we believe that we will continue to improve our gross profit as our revenues grow. Management believes that with anticipated increased production volumes, efficiencies will continue to improve, and the fixed overhead cost per unit will decrease. In addition, our suppliers believe that costs that have increased over the past year should start to decrease beginning in 2023. This should result in increasing gross profits on the EV ARC ™ and Solar Tree® products in the future.
The Company may be required to raise capital until it achieves positive cash
flow from its business, which is predicated on increasing sales volumes and the
continuation of production cost reduction measures. In
On
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Management believes that evolution in the operations of the Company may allow it to execute on its strategic plan and enable it to experience profitable growth in the future. This evolution is anticipated to include the following continual steps: addition of sales personnel and independent sales channels, continued management of overhead costs, increased overhead absorption resulting from volume growth, process improvements and vendor negotiations leading to cost reductions, increased public awareness of the Company and its products, and the continued acceleration of average sales cycle opportunities. Management believes that these steps, if successful, may enable the Company to generate sufficient revenue to continue operations. There is no assurance, however, as to if or when the Company will be able to achieve those operating objectives.
Capitalization
On
Concurrent with the offering, the Company effected a one-for-fifty reverse split
of its issued and outstanding common stock (the "Reverse Stock Split") and
reduced the number of authorized shares of common stock from 490,000,000 to
9,800,000. No fractional shares were issued as a result of the Reverse Stock
Split. Fractional shares were rounded up or down to the nearest whole share,
after aggregating all fractional shares held by a stockholder, resulting in the
issuance of 187 round-up shares. Any stockholder holding less than 24 shares of
Common Stock on a pre-reverse stock basis were paid in cash for such fractional
share of Common Stock, which totaled
On
The Company filed a "shelf" registration statement on Form S-3 and an
accompanying prospectus with the
On
In
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that are material to investors.
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