Good day and welcome to the Beam Global Year-end 2021 Financial Results and Corporate Update Conference Call. All participants will be in a listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Ms. Kathy McDermott. Please go ahead.

Thank you. Good afternoon and thank you for participating in today's fiscal 2021 conference call. We appreciate your support and interest in Beam Global and for taking the time to join our call. Joining me today is Desmond Wheatley, President, CEO and Chairman of Beam. Desmond will be sharing his thoughts and observations about our fiscal 2021 results and his perspective on the business. But first, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Beam's periodic report on Form 10-K that will be filed tomorrow, March 31, 2021, our most recent Form 10-K and other periodic reports filed with the SEC. The content of this call contains time-sensitive information that is accurate only as of today, March 30, 2022. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. I'd now like to take you through financial results for the 2021 fiscal year ended December 31, 2021. Beam Global reported record revenues in fiscal 2021 of $9,001,751 compared to $6,210,350 in fiscal 2020, an increase of 45%. In the fourth quarter of 2021, the company generated revenues of $3,487,649, a 56% increase over $2,200,706 in the fourth quarter of 2020. The company invested in sales and marketing resources during the past two years by increasing the sales team, adding consultants and investing in marketing. We're delivering more higher unit orders, the largest of which was a 52-unit order for the State of California Department of General Services. This is an increase in state and federal funding programs available to provide incentives to invest in electric vehicles and electric vehicle infrastructure. These programs have supported our growth and we expect that they will continue in the future. Our gross loss in fiscal 2021 was $971,644 or 10.8% of sales compared to $710,974 or 11.4% of sales during fiscal 2020. The gross loss in the fourth quarter of 2021 was $340,624 or 9.8% of sales, compared to $537,937 or 24.4% of sales in the fourth quarter of 2020. During 2021, we saw price increases on many of our purchase materials primarily for steel and batteries as well as transportation cost increases due to COVID-19-related issues. We were able to partially mitigate some of the transportation costs by delivering systems using company resources. We implemented some design changes and streamlined our manufacturing which provided some cost reductions and labor efficiency during the year. In addition, with the increased production levels in 2021 compared to 2020, we were able to benefit from increased fixed overhead absorption. This resulted in a small improvement of our gross loss as a percentage of sales in 2021 compared to 2020 despite the cost increases. Operating expenses as a percentage of revenue decreased by 10% in fiscal year 2021 compared to 2020. Operating expenses were $5,627,674 in fiscal 2021 compared to $4,496,660 in fiscal 2020. Operating expenses in the fourth quarter of 2021 were $1,674,683, down from $1,799,242 in the same period of 2020. The increase in total year operating expense was primarily due to increases in sales and marketing to support revenue growth, research and development for design changes and cost reductions and accounting and filing fees related to a change in auditors and our proxy and meeting costs. Net loss as a percentage of revenue decreased by 11% in fiscal year 2021 compared to 2020. The net loss was $6,596,039 for the 2021 fiscal year compared to $5,213,025 for the 2020 fiscal year. For the three months ended December 31, 2021, the net loss was $2,014,811 compared to $2,336,524 for the same period in the prior year. This is primarily attributable to the increase in gross loss and increased operating expenses. At December 31, 2021, we had cash of $21,948,512, compared to $26,702,804 at December 31, 2020. The cash decrease was primarily from operating activities which was partially offset by cash generated from the exercise of warrants. Our working capital decreased from $28,133,031 to $24,611,810 from December 31, 2020 to December 31, 2021. And with that, I will turn the call over to Desmond to provide a business update.

Thank you, Kathy, and thank you, everyone, for joining us and for your support. Before I begin, I want to remind you that we are under the flight path of Marine Corps Air Station Miramar. There may be some aircraft flying overhead during this call, and if it gets too loud, I might need to pause for a moment, but I'll continue right where I left off. Just be aware of that, and please don't worry about me. In 2021, Beam Global achieved record-breaking milestones across various areas of our business. Let's begin with our deliveries and revenues. In the second quarter of 2021, we delivered a record number of EV ARC systems, which was an increase of 109% compared to the same period last year. The third quarter also saw record deliveries and revenues, with an increase of over 123%. In Q4, we continued the trend with a 45% increase in system deliveries compared to 2020, contributing to the highest annual totals for system deliveries and revenue in our history. By the end of the year, we had produced 124 EV ARC systems, delivered 119, and generated over $9 million in revenue, up from $6 million in 2020, marking a 45% increase year-over-year. In Q4 of 2021, revenues increased by 59% compared to the same period last year. In the past, a strong fourth quarter left us with little or no backlog entering the new year. However, in 2021, alongside our record deliveries and revenues, we also experienced a record year of sales, up over 131% from the previous year. This allowed us to enter the new year with a robust backlog of contracted orders, minimizing interruptions to our production. While backlog can fluctuate as it is converted to revenue, entering the new year with a healthy backlog is encouraging, especially since January and February tend to have lower order volumes. This historic level of new contracted sales was driven by several record achievements. Notably, we received the largest single order in our history, a 52-unit system order from California's Department of General Services, funded by California's Office of Emergency Services. This confirms the importance of our EV charging infrastructure products in disaster preparedness and resiliency. Additionally, we set another record with our first-time order from the United States Marine Corps for 21 EV ARC systems intended for deployment across Marine Corps bases in the Continental United States and Hawaii. Both the DGS and Marine Corps systems have been successfully deployed. Moreover, 2021 was our first full year with an active GSA contract, leading to unprecedented revenue from federal opportunities. The U.S. government remains the largest consumer of diesel and gasoline globally and is transitioning to zero-emission vehicles. While the federal government typically moves at a slower pace compared to the commercial sector, once it gains momentum, it tends to progress rapidly. Beam Global offers the fastest deployed, most scalable, and cost-effective EV charging infrastructure products available. Our solutions are made in America and provide clean energy for the growing fleet of electric vehicles. We anticipate that the federal orders we received in 2021 will seem modest as the contract machinery ramps up over the next few years. To ensure success, we've increased our investment in government relations, which has proven effective. We've worked to include essential language regarding EV charging infrastructure in funding bills and gained eligibility for previously excluded programs like CALeVIP and the Carl Moyer Incentive program. Our presence on the Board of Directors of the Electric Vehicle Charging Association and our inclusion in the Federal Highway Administration's program guidance document are significant endorsements. While some people have suggested there's a downside to our government clientele, it's important to note that before the pandemic, enterprise customers represented more than half of our annual revenues. However, with the pandemic changing work patterns, workplace charging demand diminished. Fortunately, we adapted by increasing our government sales, compensating for lost commercial revenue in 2020 and 2021. As life returns to a semblance of normalcy, we expect enterprise spending on EV charging infrastructure to rebound. In 2021, we received orders from various sectors, including automotive, commercial real estate, construction, and education. Importantly, we are not competing with utilities; many are now among our customers because our product meets their needs for rapid deployment of EV charging stations. The increasing frequency of blackouts and brownouts has prompted utilities to seek resilient energy solutions. Our products can provide charging and emergency power during power outages, fulfilling a vital and immediate need amidst a national shift towards electrification. The need for more efficient and resilient solutions is heightened as electric vehicles demand more electricity than the grid can currently supply. With our offerings, we are creating a strategic electric reserve that addresses the urgent requirements of our customers. Our pipeline continues to grow, boasting over $90 million today. Importantly, the size of initial customer orders is increasing, and the timeline from first contact to order receipt is shrinking, signaling a stronger demand for our products. As we boost production capacity through investments in our factory and enhance efficiency, we foresee converting our expanding pipeline into revenue more quickly than ever. Although we face cost pressures from materials, we've managed to improve gross profitability in 2021. We've strategically reduced per-unit labor costs and optimized transport logistics, allowing us to remain competitive amid inflation. We anticipate that as material costs stabilize, our internal cost reductions will lead to a notable recovery in gross profit. We also recognize opportunities for passing on price increases on certain components, while simultaneously enhancing margins through ongoing cost-saving initiatives. Our collaboration with our recently acquired battery technology company will further reduce overall costs and enhance our product offerings. We are well-positioned to return to positive gross profit this year and prioritize efficient cash management to achieve bottom-line profitability. In terms of capital, we are currently well-capitalized and do not foresee the need to raise additional funds, although strategic opportunities may arise in the future. Notably, the acquisition of AllCell Technologies has brought valuable technology and talent without further capital requirement, aligning our interests with those of our new stakeholders. Our corporate sponsorship business is also progressing, albeit at a pace that may not meet everyone's expectations. We are working with a respected consultant group to sell sponsorship opportunities, with numerous qualified prospects showing genuine interest. This validates the potential of our sponsorship model. In 2021, we set multiple records, including a world record for the longest flight of an electric aircraft powered solely by renewable energy. Our products hold great promise in niche markets, such as airports, where charging infrastructure is essential. We continue to innovate, improving our existing products and introducing new solutions to meet evolving market demands. We remain optimistic about breaking our records again in 2022 and beyond. Thank you all for your support, and I welcome any questions.

Please proceed with your questions.

I wanted to mention a couple of things. I'm curious about the details regarding the allocation of the federal funding that is forthcoming. Specifically, similar to the procurement contract you have in California that facilitates purchasing for state and municipal agencies, are you noticing a sense of urgency in other states, particularly regarding state incentives? Are buyers eager to place their orders, or are they taking a more cautious approach as they await information on how the infrastructure bill funds will be allocated?

I believe that taking a step back and observing is a fitting description of our experience in this business over the past decade. I've often mentioned that we entered the market a bit too early, but now we find ourselves in a strong position. We currently hold contracts with the states of California, Florida, and Massachusetts. However, the most significant aspect related to this discussion is our GSA contract with the federal government. This contract is unique because, unlike most GSA contracts that are limited to federal entities, ours is accessible to any governmental entity that has a disaster preparedness or emergency need. Our product caters to those requirements. Therefore, entities that are eager to proceed and seek funding can utilize the federal contract without needing a direct contract with us. Furthermore, California has also made its contract usable by other state and governmental bodies. These agreements provide excellent opportunities for us, and we are witnessing heightened activity as a result. Regarding your core question, I believe there is still some anticipation regarding how federal funds will be allocated, particularly the $5 billion for highways and the $2.1 billion aimed at rural and disadvantaged communities. We have invested a lot in this area and are well-prepared to capitalize on it. Simultaneously, we are observing a growing interest and urgency surrounding EV charging infrastructure. The shift in dynamics compared to one or two years ago is remarkable. As I mentioned earlier, the size of our orders has increased, and they are progressing more rapidly through our sales process. This acceleration is not due to improved sales techniques but rather to a genuine need for our product on a quick turnaround. Thus, we are witnessing a mix of factors at play. However, federal spending, akin to a battleship, takes time to get moving, but once it does, it can be quite challenging to halt its momentum.

Great. And I was wondering, as you look at the year ahead as far as your internal R&D, I'm just curious, can you talk about maybe what some of the priorities are? I guess I was particularly curious about on the software side and whether this is going to be a big year in terms of, for example, new releases or if it's going to be more sort of a blocking and tackling sort of maintenance basic enhancements kind of the year?

Yes. First of all, our R&D focuses on serving sales and marketing as its main client, which is our guiding principle. We invest in R&D not for enjoyment or curiosity but only in areas where we see substantial market opportunities for monetization. This approach extends to how we invest in patents as well. You've brought up a very interesting point regarding our software initiatives, and yes, we will be focusing more on software and firmware this year while continuing our emphasis on hardware. The EV standards are a top priority for us to release this year, as we believe they could become one of our largest, if not the largest, sellers. We plan to enhance all our products, making them more intelligent, data-rich, sensor-enhanced, and easier to manipulate, which will significantly improve their market capabilities. As a technology company that develops new and proprietary technologies, we can accelerate our progress in ways that connecting to the grid cannot achieve. Unlike physical construction, where time constraints exist, our products will continue to improve in intelligence and capability. You can expect to see substantial investment in this area this year. Additionally, we will maintain our strong investment in the energy storage segment as well, always with sales and marketing goals in mind, ensuring our approach remains centered on profitability rather than purely scientific pursuits.

The next question will come from Tyler DiMateo with BTIG.

I was just wondering if we could dive a little bit deeper into the AllCell acquisition. I know you briefly said it gives you access to new customers and markets. Can you kind of talk about the overlap there in terms of the customer base and the differentiation and just compare them, if you don't mind, please?

I would be happy to do that. Throughout my career, I've been involved in numerous mergers and acquisitions, and I have to say this is the most strategically advantageous acquisition I've encountered. It aligns perfectly with us in terms of cost reduction, revenue generation, and gross profit enhancement. To answer your question, they have been selling energy storage solutions to a customer base that aligns closely with our electric vehicle charging clients over the years. Their energy storage products cater to electric vehicles, micromobility, drones, submersibles, and aircraft, while we have focused on EV charging for electric vehicles and electric bicycles or motorcycles, as well as providing power for drones and aircraft. Essentially, we have been targeting similar markets independently. When I examine their customer list alongside ours, there's a wealth of opportunities. In fact, in all my discussions with anyone seeking EV charging for new innovative vehicles or constructions, my immediate thought is that they are also battery consumers. Obviously, they would require batteries that are safer, more energy dense, longer-lasting, and more affordable, which is exactly what we offer. This is highly beneficial for us. On the other hand, many of their customers have electric devices, and their biggest challenge is establishing charging infrastructure. We excel in providing that at a quicker and more scalable rate than anyone else. Cross-selling is often touted as a benefit of acquisitions, and as an investor with significant M&A experience, I tend to view it skeptically. It sounds appealing, but I question how frequently it materializes. In this particular instance, I sincerely believe there is a substantial opportunity. However, it was not the primary motivation for the deal; we would not have proceeded if it didn't promise to enhance our profitability, increase our revenue, and make us more competitive. Cross-selling is not the main focus but rather an additional benefit that we see as having potential importance.

The next question will come from Alejandro Nuno with Maxim Group.

I was wondering if you could provide more details about Electrify America. They recently made an announcement regarding new charging stations that will feature solar canopies. I understand they have ordered 30 EV ARCs so far. Are there additional orders expected soon? Have they discussed how much they plan to invest in that off-grid EV ARC technology?

I'm not going to comment on the specific orders that Electrify America may make, but I can say that we are actively engaged with them. I had a conversation about our business with them just last night. It's important to clarify that installing a solar canopy with an EV charger is different from what we do. Many companies are now putting solar canopies above or near EV chargers, which is a construction project. Typically, these solar canopies are connected to the grid. Even if there are batteries on site, they rely on the grid, and the whole setup involves permitting, foundation work, and the coordination of teams, engineers, and specialists. That’s not our area of expertise. I don’t have anything against battery storage or EV chargers as a way to manage utility costs, but we shouldn’t confuse that with our offerings. Our focus is on resiliency; we generate energy every morning regardless of the grid. After events like Hurricane Ida, where some areas had no power for six weeks, our products continue to function and produce electricity. We excel in terms of resiliency. Moreover, we are a product-focused company, not a project-based one. Everything we make is produced in a factory and delivered ready to operate. This isn’t about measuring and starting a long construction process. We value Electrify America as a customer and look forward to expanding our partnership with them. We support their use of solar arrays, but it should not be compared to our business.

Great. I appreciate that. And then one last question. Along the lines of the increase for the EV ARC, the number you gave was about $6,000, correct?

Now to be absolutely clear, the increase I cited was $6,600, a little bit more than that actually. And what that refers to is the increase in cost of components materials like steel and aluminum and that sort of stuff that we have incurred and absorbed since COVID began. So we've had an increase of $6,600 in cost. And yet we improved our gross profit. That's the thing I want everybody to understand from this. As you're looking at gross profitability, just please understand that we did not increase our sales price. And yet we increased gross profitability or improved gross profitability, to use a better word, in the face of all these costs and in spite of all these cost increases which tells you we had to get the money somewhere else. And the only way we could do that would be by reducing our own costs through increased efficiencies, disciplines, and other things that we have been doing.

Understood. So that $6,600 did not include the cost of the chargers that you were taking on in 2021, correct?

And in that situation, there was indeed an increase in the cost of the charger. I was comparing two EV ARCs and accounted for the increased charger cost. I noted that, while I do not plan to raise the cost of an EV ARC today, it's important to remember that when we deploy an EV ARC, it comes with a factory-integrated charger produced by other companies such as ChargePoint, Blink, and now Electrify America. The prices of these chargers have risen. Moving forward, we will inform our customers that we will not cover the price increase for the EV chargers they purchase from any vendor; instead, we will pass those cost increases on to them. In 2021, we absorbed those costs, but that practice will change. In one example, this situation represented about 2% of our gross profit. However, we see greater potential for margin expansion through cost reductions. We already have visibility on material cost savings from our engineering and operations teams, and we will steadfastly pursue these initiatives. I am confident that additional substantial cost reductions will come from replacing our current energy storage solutions with our own, leveraging the new battery packs from the company we recently acquired, previously known as AllCell Technologies in Chicago. Batteries currently make up almost a third of our available materials, and I believe that the initial margin recovery will lower our overall costs by around 7%. Collaboration between our Chicago engineers and scientists and our San Diego engineering team is expected to yield up to a 15% reduction in our overall costs within the next year. The combination of our cost-cutting efforts, including a significant drop in battery costs, a return to normal material costs, and the increased volumes we expect in 2022, gives me strong confidence that we will achieve positive gross profit this year.

Got it. And then the folks who are coming to get a tour of the facility through the sponsorship side of things. how deep are those discussions? I mean at what stage of these transaction potential are you at with those guys?

They understand the costs, the business model, and the advantages, and they are approaching us to feel confident in our capability to manage it. As I often remind my sales team, if we aren't closing deals, we aren't making money, no matter how many people we inform about the costs and benefits or how many tours we conduct. I want to convey the kinds of organizations engaging with us; it seems unreasonable to think they would visit and tour the facility without having a significant interest in what we offer. I don't want to exaggerate the situation, and I aim to be cautious in my description. However, with my experience in this business, I've learned that when enough inquiries arise, eventually one of those will lead to a sale.

Have there been other tours like this or other sort of the discussions that have gone thus far on the sponsorship side of things?

No, it's much more active now than it's ever been. There's no question about that. It has taken some time. The sponsorship of this network is very much aligned with the whole electric vehicle trend. A couple of years ago, when we first started presenting this to people, there wasn't much urgency, and they didn't fully understand it. However, that is changing now. You could easily list about ten different companies that would be obvious players for this in just a few minutes, and some of those might be on our pipeline list.

The next question will come from James, investor.

Yes. So I had a question regarding the pricing strategy. So it's almost a three-part question. First one was, is there a price ceiling right now on your product that you feel that you can't bump up against? Number one. And then as far as the strategy, most well-run companies, I would say, are passing on raw material or the cost increase now more so than we've ever seen. And for the most part, consumers are accepting those increases. I'm a firm believer in your product and the need for your product and would anticipate a huge demand. So I was just curious as to why you felt it was so important to not pass on legitimate cost increases on your current product line as opposed to putting forward some modest increases? Third question was on the pricing. Is that due in part to the government contracts you've got that limit the potential or have a fixed price in the contracts? And then the last question being absorbable. This is if you know what percent of your cost of goods sold is actually the purchase price of the chargers that you're installing?

Yes, those are all great questions, James. We spend a lot of time discussing these topics here. To answer your first question, there is no ceiling on our product pricing. We’ve developed a new product for a relatively new industry without direct comparisons. It's not like I'm competing with Komatsu against Caterpillar, and it's not a cost-plus-margin model like traditional projects. We've had to price our product in a way that considers two factors. Firstly, our sales are consistently increasing, indicating that our prices aren't too high for customers. Secondly, we have a clear path to profitability, and I believe we can achieve a 50% gross profit at our current price, adjusting for inflation. If we scale our volumes, it will lead to significant profits due to our operating leverage. Regarding government contracts, we do have certain pricing agreements that may require negotiation for increases, but I'm not concerned about that. The current opportunity for our business lies in cost reduction. We don't need to raise our prices; we can reduce costs as we increase our volumes, and we’re already working on this. Volume is crucial for us. In fact, I would encourage our salespeople to reduce the price if it meant selling more units, as this would be highly profitable for us. As for the cost of the EVSE in relation to our total product costs, it varies from a couple of percent to 10%, depending on the customer's choice. Additionally, the cost of the EVSE doesn’t always correlate directly to its capabilities – some expensive options may offer capabilities similar to less costly ones. Ultimately, our customers decide what type of chargers or service providers they want; our role is primarily to handle the installation process. Did I address all your questions?

You got them all.

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

Well, we're over time. So I'm going to keep them brief. You can probably gather from my tone that I'm feeling pretty good about the business right now. Everybody is operating well. The first half of last year was not stellar for us. We made the changes that we needed to make, I think, when it was all personnel. And so any of the benefits that we described year-to-date pretty much took place in the second half, particularly in the fourth quarter. I'm really looking forward to continuing through this year. Everything seems to be lining up right for us. It's tough. We've got a lot of inflation to deal with but everything is lining up for us at the moment. And I feel very good about the business. I'm happy that you're involved. I thank you for your questions and your attention. And let's make some money together. Bye-bye.

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