Hello and welcome to the Beam Global First Quarter 2024 Operating Results Conference Call. All participants will be in listen-only mode. As a reminder, this conference is being recorded. I would now like to hand the call to Lisa Potok, Chief Financial Officer. Please go ahead.

Hi. Good afternoon and thank you for participating in Beam Global's First Quarter 2024 Operating Results Conference Call. We appreciate you joining us today to hear an update on our business. Joining me is Desmond Wheatley, President, CEO and Chairman of Beam. Desmond will be providing an update on recent activities at Beam, followed by our question-and-answer session. But first, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address 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 most recent filed 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, May 21st of 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 of Beam’s first quarter of 2024. We had record first quarter revenues of $14.6 million, increasing 12% over the same period in 2023. The first quarter increase can be attributed to an increase in our federal sales. The timing of our orders overall may continue to be uneven due to the timing of our customer approvals and their budget cycle. We have begun the process of production of our EV ARCs in our Serbian facility and expect to deliver our first sale to the Ministry of Defense in quarter two. We generated gross profit with a gross margin of 10.2%, the highest margin ever. The improvement in gross margin is primarily because of the cost reductions that we implemented in late 2023, as a result of our engineering improvements to the EV ARC. Our gross profits do include $0.2 million for non-cash and tangible amortization, which negatively impacts our profits. Operating expenses for Q1 of 2024 was $4.5 million, or 31% of revenue compared to $3.8 million or 30% of revenue for the same quarter in 2023. A $0.7 million increase is mostly attributable to a $0.4 million increase in consultant costs related to the integration of our new ERP accounting software, as well as sales and marketing, government relations, and engineering design support. We have $0.3 million for operating expenses pertaining to our Beam Europe operations. As for our net loss, it was $3 million or 21% of revenue for the first quarter of 2024 compared to $3.8 million or 29% of revenue for the same period in 2023, an improvement of 8% year-over-year. The first quarter net loss included non-cash expense items such as depreciation, intellectual property amortization, and non-cash compensation expense of $1.1 million in 2024 and $0.9 million in 2023. 2024's net loss, excluding these non-cash items was $1.9 million or 13% of revenue. Our cash balance on March of 2024 was $5 million, compared to $10.4 million at December of 2023. The cash decrease was primarily due to cash payments for the acquisition of Amiga of $2.7 million, as well as operating cash used to increase inventory at Beam Europe. Accounts receivable at March 2024 grew $4 million, which all the way to $20 million, $10.7 million of this balance is due from three customers. Our working capital decreased from $23.8 million to $17.8 million from December 2023 to March of 2024, and this is mainly due to the accrual of our contingent consideration for the Amiga transaction of $4.3 million. We're moving that to current liabilities as of March of 2024 versus non-current liability at December of 2023. This contingent consideration is a non-cash earn-out based on revenue targets. The payment is all in the company's common stock. I will now turn the call over to Desmond to provide a business update.

Okay, Thank you, Lisa, and thanks everybody for joining Beam Global's first quarter earnings call. I'm actually speaking to you today from Abu Dhabi, where I'm spending a week working on growing our business in the Middle Eastern region. There's a great deal of opportunity here, and our recent expansion into Europe has enabled us to start taking advantage of opportunities on a far greater scale than anything we've previously been able to address. My comments will be relatively short because, of course we've just recently had our earnings call for the full year of 2023 and the 10-K, during which we did a fairly comprehensive update of the business and the various opportunities in front of us. Nevertheless, things are happening very quickly at Beam Global, so beyond simply updating you on the numbers, I'll be talking to you about a couple of exciting opportunities in front of us, as well as outlining some highlights from the first quarter. Before coming to the Middle East, I spent a week in our Serbian facilities, catching up on our operational expansion there, as well as meeting with existing and prospective customers. It was a very productive week. I'm thrilled by the progress we've made in Europe and equally excited by the opportunities we have in front of us over here. Aside from the quality and very high level of business development meetings I attended, thanks to the efforts of our European management team, the greatest impression came through seeing rows of completed EV ARC systems waiting to be delivered to customers and seeing sections of the EV standard product waiting to be assembled into the first prototypes of that product, which I believe has the potential to be our biggest seller. I'm doing this earnings call in the middle of the night from Abu Dhabi, reporting on a company whose opportunities are almost unrecognizably greater than they were when I did the first quarter earnings call in 2023. The first quarter of 2024 was yet another record quarter for us in which we produced revenues which were about 12% greater than during the same period in the prior year, and more importantly, in which our gross profit showed the most remarkable improvement in our history. Our net loss narrowed and we exited the quarter with a healthy cash and working capital position. In the first quarter of 2024, we also added some excellent talent to our management team, particularly on the operations side, a move which we're confident will assist us in producing more product less expensively and further enhancing our gross profits. We continue to sell our products to excellent customers, both in the United States and in Europe, and we saw a significant increase in the percentage of commercial business we do, not at the expense of our government business, but in addition to it. Product development continued to pace with important new patents issued to us on both the battery and EV charging infrastructure sides of our business. We made significant progress on our EV standard product and excitingly, the first stages of product development on a brand new product, which we hope to bring to market before the end of this year. Returning to the numbers, our revenue for the first quarter of 2024 was $14.6 million, which is $1.5 million or a 12% increase over the first quarter in 2023, the highest revenue for any first quarter in our history. The great majority of that revenue came from EV ARC deliveries, as has been typical over previous quarters, but we did get interesting contributions from our European business and also from our batteries. The first quarter has often been our slowest, and that's particularly true of our European operations where historically their revenue and gross profit numbers have been fairly modest in the first quarter, but have grown throughout the remainder of the year. The really big news from Q1 of 2024 is on the gross profit line. During this quarter, we generated more gross profit than in any quarter in our history, and the improvement quarter-over-quarter and year-over-year far outstripped any such improvement previously. This gross profit improvement has come about as a result of the engineering and operational improvements which I've described to you in previous quarters. This is a perfect example of us doing what we tell you we're going to do and of the team executing on meaningful improvements which have a profound impact on our financial results. There's still work to do, and I anticipate a continuation of improvements as the design enhancements, value engineering, and operational improvements are increasingly recognized in coming quarters. As many of you will remember, we've also instituted a price increase for the first time in our history of about 8.25% on our base model. It's important to point out that this price increase had no material impact on our gross profit improvements during Q1, because more than 96% of the units we delivered to customers in that quarter were sold prior to the price increase taking effect, and therefore had reduced sales prices. To be clear, most of the gross profit increase has come entirely from engineering and operational improvements, not increasing the price. Nevertheless, 96% of the units were sold prior to the price increase, which means that 4% of them did have the additional 8.25% revenue on the base price of an EV ARC. That's an indication that we're moving into a period where our backlog, which was generated prior to the price increase, is starting to be exhausted, and we're moving into new backlog now, which will benefit from that price increase. There's a lot of moving parts, but some pretty basic arithmetic shows you that the combination of the gross profit generated in the first quarter, without the benefit of the price increase, when added to the increased revenue resulting from the price increase, should get us close to around 20% gross profit. And as I've said, we've got further improvements yet to make. While the percentage improvement in gross profit is significant, it's also important to look at the absolute dollars. We reported a net loss of $3 million for Q1. But in fact, the cash impact was far lower than that. $1.1 million of our net loss was non-cash, meaning that our actual cash loss for the first quarter was less than $2 million, to be exact, $1.9 million. Again, doing some simple arithmetic, you can see that with a 10% gross margin, we reported $1.5 million of gross profit, but that actually included some negative impacts from non-cash items as well. In fact, our gross profit net of non-cash items was closer to $1.8 million. We need about another $1.9 million to get to cash flow in an otherwise similar quarter. That's not a giant leap. The combination of the price increase and the continued improvements to our gross margins should put us on an understandable trajectory to cash flow. This is our dominant area of focus and as I said during the full year 2023 earnings call, we're really going to be concentrating on efficiency and gross profitability this year because achieving positive cash flow is arguably one of the most important metrics for any business and particularly an innovator in a brand new industry. By the way, while we're talking about gross profitability, our European operations' legacy business is typically slower in the first quarter than during any other period of the year. This is not surprising as they've been producing street lights, communication towers, energy infrastructure and other street furniture which needs to be deployed in environments that are better suited for those types of deployments during the summer and autumn months than during winter, particularly January and February. Beam Europe's legacy revenues generally pick up in the second and third quarter and historically they've had a marked improvement in gross profitability during those periods as well, which should further contribute to our company-wide profitability profile improvement. One last point on Beam Europe and cash is how that transaction is affecting our working capital. Because we're a very simple company, working capital is generally an excellent proxy for cash, because we convert almost everything in working capital that isn't cash into cash quickly. AR, inventory, work in progress, etc. At this period, there's a misleading contributor to our decline in working capital and it has to do with the acquisition of Amiga or Beam Europe as it now is. Part of that transaction, and a very good transaction it was, is that we got the land and buildings in the purchase price. It's nice when I visit there; I don't have to think about lease payments. Instead, I focus on the wonderful growth opportunities we have, and we don't have to ask a landlord's permission because the land and buildings are on our balance sheet. But anyway, back to my point: a big part of that transaction are the earn-out payments for 2024 and 2025. We set pretty high bars for the very excellent Beam Europe management team to hit, and if they do, they get earn-out payments. I love crafting deals like that because it keeps everybody concentrated on our joint success. Their earn-out payments are non-cash and entirely stock-based. Nevertheless, because we believe they will hit their targets, those earn-out payments have become current liabilities for 2024. As a result, we took a $4.3 million non-cash impact to our working capital balance. If you're looking at our working capital and you see it coming down by $6 million in the period from December 31 to March 31, be absolutely clear that $4.3 million of that is non-cash. It's contingent consideration based on our assumption that Beam Europe will hit their earnouts, which again are stock only. One contributor to our belief that they'll hit their targets is the very good news that the Beam Europe legacy business' purchase orders are up by about 30% this year over typical years. We should benefit from that in the coming quarters as well. We'll also benefit from the fact that we've leveraged our balance sheet to allow our European operations to do something they could never do before they became part of Beam Global, and that is create inventory for future periods. Previously, Beam Europe was an entirely cash-based operation with no debt and without even credit facilities with their vendors. As a result, during slow sales periods, like the first quarter, they produced very little product and yet they carried the overhead of their team members and facilities just the same. When sales picked up later in the year, they'd have to rapidly buy materials and rush to complete the products, often resulting in lower efficiency and increased costs due to overtime. One of the first changes we instituted post-acquisition was to use our cash to create stocks of inventory of the most commonly acquired products that Beam Europe makes and sells. This has allowed us to keep the team working at a steady cadence and fully engaged during periods when they would otherwise be idle. It's also allowed us to create inventory which would enable faster delivery to customers when the orders do pick up in the second and third quarters. We'll get the combined impact of lower costs to produce the product and more rapid delivery to expected customers. It's been an excellent and strategic use of Beam Global's balance sheet. And while it's resulted in a reduction in our cash position, which makes some people nervous if they don't look at the combination of cash and inventory, it's been absolutely the right thing to do and it will pay dividends in terms of increased revenue and improved gross profitability as the year progresses and we get all the cash back. Speaking of cash, we ended the quarter with $5 million in the bank having made the second of two cash payments to Amiga, which if you remember are combined with already completed equity payments. We built up our inventories, and shipped sufficient product at the end of the quarter to have about $20 million in accounts receivable. Of this $20 million, about half is due to us from three of our largest and most reliable customers. We're not worried about collecting from them or from any of the others. In fact, I anticipate collecting most of this money any day now, which will of course have a profound positive impact on our cash balance. Our cash position is healthy and our rapidly improving gross profits are moving us towards a position where our cash position becomes less of an existential issue because, as I mentioned earlier, we're on a clear and easy to understand path to cash flow. Our operating expenses were only marginally higher than they were in the first quarter of 2023, despite having considerable unusual expenditures. Of course, we've added an overhead operation in Beam Europe, but like our American operation, it is very lean. While we have a massive increase in opportunity, we have a very modest increase in our operating costs as a result of that opportunity. The most significant increase in our operating costs came as a result of our integration of a new ERP system. This integration is a significant milestone for the company. It will make us far more efficient with tangible results contributing to improved profitability and the ability to turn orders faster, more efficiently, and with less waste. If you remove these extraordinary items, we actually trimmed our operational expenses, even in the face of top-line growth and further expansion of the business. Sales activities are picking up again with our pipeline increasing to about $160 million today and backlog at March 31 of around $20 million. During the first quarter, we announced new orders from the US Army, the Department of Homeland Security, the Federal Railroad Administration, national parks, and many other federal entities. Several of these purchase orders were multi-million dollar orders, the most notable of which was a $7.4 million order from the US Army, which adds to the previous $30 million purchase order we received in 2022. We continue to receive orders from state and municipal entities, and while we talk about budget uncertainty and the impact of the election year, our sales and pipeline are still robust on the government side of the business. Also encouragingly, during the first quarter, we saw a significant increase in commercial orders, about 300%, which have come about as a result of our efforts to continue to diversify our revenue opportunities across the broadest possible base of customers. Probably the most exciting selling activity in the first quarter was being issued a government contract from the United Kingdom Crown Commercial Services. Several aspects of this are exciting. First and foremost, it's our first large government contract in Europe and it's very similar to our federal GSA contract in that it enables the British government to buy our products without going through any further cumbersome processes. Secondly, and this is really where the rubber meets the road, it resulted almost immediately in a large order from the British Army for EV ARC products for their overseas bases. This was our first million-dollar order in Europe, marking a major milestone for the acquisition and growth there, just a few short months after we closed on that transaction. It took us about five years to get our first $1 million order in the United States, and less than five months to do the same thing in Europe. This is an indication of the rapid evolution in the EV Charging space, but also, probably more importantly for us, it's a strong indication of the validity of the European market and our investment in that market, the world's largest market for our products at a time when we are increasingly recognized as an important player in the infrastructure space. We're also actually working on a couple of the largest opportunities we've ever worked on and interestingly, both have been enabled by our acquisitions. They're not inked yet, but the level of serious interest in our offerings from very serious players is very encouraging. You may have read about our recent utility scale battery storage seminar, which we conducted in Belgrade during the first quarter. It was attended by 40 or 50 regional leaders from energy and government, and the follow-up and level of interest we've received has exceeded my expectations, including some active opportunities we are working on right now. This is the perfect combination of the expertise and capabilities we acquired with the AllCell Transaction and the relationships and new market opportunities we acquired with the Amiga transaction, combined with Beam Global's innovation and product engineering prowess. As I started the call by saying, I've just spent a week in Serbia with Beam Europe and now in Abu Dhabi presenting rapidly deployed EV charging and energy security products. The level of enthusiasm and serious interest that we're getting from major players is also very encouraging. We're playing in a much larger arena. The stakes are much higher and we've done a fantastic job of positioning ourselves to take advantage of opportunities, large and small, in the most active regions in the world for products like ours. Several of the opportunities we're working on now are larger than anything we've ever done before, and I believe that we're well positioned to continue to attract more of that sort of attention in the near future. It was gratifying to see completed EV ARCs waiting to be placed in containers to be shipped to our customers from our European facilities. It was also very gratifying to see more components of our brand new EV Standard product completed and waiting shipment to Chicago, where the Beam team will integrate our proprietary batteries, electronics, windmills, and solar components, which will complete those so that they're ready for demonstration at the beginning of the second half of 2024. Everyone on the sales teams in San Diego, Chicago, and Serbia is excited about demonstrating EV Standard to their customers and prospects. There have been some costs associated with these activities and we've used some cash to enable them. Is it worth it? Without question. One other interesting sales development in Europe is that we're working to add sales channels to our existing internal sales team. We met with two qualified candidates while I was in Serbia, and I'm looking forward to advancing our relationship with these quality groups. They will act as a significant force multiplier with local presence in markets that we believe offer significant opportunities. Because they'll pay for performance on success, they'll not add to our SG&A and operating costs. It makes a lot of sense for us to do this in Europe because it's both a fast and somewhat dislocated market. Once we've successfully integrated this model into our European operations, we intend to roll it out in the US as well. These sales channels, combined with our new products, new markets, and improved ability to execute, are all contributing to our being able to fish in a much larger pond. I believe that this is going to position us for continued and sustained growth. To sum up, we generated record first quarter revenue. We had by far the highest gross profit in our history. We executed on the engineering and operational improvements we promised. We managed our cash and used it to increase sales and improve gross profits. We continue to win patents and develop new products. We've made tremendous strides in integrating our European acquisition and we're working on the largest and most exciting opportunities we've ever had. For the remainder of 2024, we will remain focused on efficiency and improving gross profitability above all other goals, with the ultimate goal of cash flow being our primary objective. I've never felt better about the global Beam team and I believe that even in the face of market uncertainty and chatter about weakness in EV sales, we will continue to operate with discipline and attain our goals. Thank you for your attention, and I'll now hand it back to the operator to take any questions you have for me. Please do limit yourself to one question and one follow-up, as I want to ensure that everyone has a chance to have their questions answered.

Thank you very much. Today's first question comes from Sameer Joshi with HC Wainwright. Please go ahead.

Hi, Desmond, Lisa, how are you? Thanks for doing this late night from there. The question I have is about the backlog and the pipeline. What does it comprise of geographically and also between AllCell, EV ARC and Amiga? And then for the pipeline, what do you consider pipeline? Are these requests or proposals that you have applied, you sent the proposals, or how do you define that?

The backlog is still mostly comprised of the Beam Global EV Charging Infrastructure products, so what you would consider to be more traditional Beam products. Backlog contribution from Beam Europe is about $3 million at March 31. They're going to be less backlog intensive because as I mentioned before, historically, they've always made and delivered products as they've contracted. They have longstanding relationships with existing customers who come back to them and order products over and over again, but it doesn't really stay in backlog very long because it's generally produced and shipped off to the customer before too long. As far as the pipeline is concerned, we're strict about what pipeline means. Basically, in order to qualify for our pipeline, you need to be a customer who understands the product, has budget for the product, is qualified to make the buying decision and has indicated that you are moving towards a purchase order. These are not just people who have expressed a passing interest in our products; these are active operating customers with budget and authority. We have a fairly high pipeline to backlog conversion ratio. The actual percentage of customers who express interest in the product and have budget historically tends to move to backlog at a higher proportion than I have seen in any other business. While we're confident that a large percentage will convert to backlog, we have less confidence regarding when they'll do that.

Understood, thanks for that color. And just one more, the contribution from Amiga, I'm guessing, I think I heard you say you're expecting a 30% increase in purchase, or have experienced a 30% increase in year-over-year purchase orders. If we consider that Amiga probably returned around $10 million last year, should we expect it to do around 30% over that amount this year?

Yes, their actual purchase orders received year-to-date are up about 30% over their historical norm. There's a lot of contributors to that, as I mentioned during the call. Some is due to our balance sheet usage and increased confidence in them as a result of being part of a US and NASDAQ traded company. We're enabling them to sell more aggressively and take on more than they would have in the past. The acquisition has been very impactful for them positively. However, this does not necessarily tie in a straight line to a 30% increase year-over-year revenues, as these are just the purchase orders received year-to-date. I should emphasize that we have contingent consideration in place which is entirely non-cash. This contingent consideration will be made in shares of Beam Global stock, which adds further encouragement for them to succeed. I stress how vital this is for our joint success. Our actual expectations on their performance are very high, but it’s important to remember that they must hit aggressive earnout targets to do so.

Yeah, no, I agree with that. Thanks for that color and good luck.

Thank you very much.

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

Thank you, Desmond. Hi, good. It's great to hear from you. I think you just said actually that you're starting to deliver your first European EV ARCs at the end of this month. Were there any adjustments or inefficiencies at the beginning of making the EV ARCs in Europe, please?

I actually saw the units that are getting ready to get loaded into shipping containers and head out at the end of this month. Were there inefficiencies? Yes. These are the first units they made, but the quality is very, very good and the end product is excellent. I'm thrilled that it's happened as quickly as it has. A couple of important points: we've self-performed in Europe some significant tasks that we've always outsourced in the US. The economics, taking out the inefficiencies because of the first ones we've done are clear. The economics for producing EV ARCs in our Serbian facilities are far superior to the economics of doing it in the US. All the gross profit improvement we've announced has come from our US operations because we haven't recognized the revenue on the Serbian units yet. I'm anticipating that those inefficiencies will reduce rapidly. It's a very motivated team with a great history of producing a lot of product efficiently. Because of these economic improvements, largely due to the self-performance of some really expensive outsourced tasks, I'm hoping for much better gross profit profiles in our European operations than in the US. While we’ll continue to improve in the US, the company-wide impact will be that we should get better gross profitability from units produced in our Serbian facilities. Yes, some inefficiency initially, but a great product that’s very well made and with clear opportunities for better economics moving forward.

Thank you, Desmond.

Thank you, Tate.

Thank you. The next question comes from Chris Pierce with Needham and Company. Please go ahead.

Hey, good evening.

Hey, Chris how are you?

I'm doing great. On gross margins, from here, is it as simple as the more EV ARCs you sell, the higher your gross margins go because you're absorbing fixed costs on top of the price increase you have, or are there further engineering efficiencies that you can drive out as far as the San Diego production?

Yes, definitely both. There's no question that the more we produce, the better we get from a gross profit point of view because of fixed overhead allocations. But more than that, the more of them we produce, the more stuff we buy, the better buying we get. That's another reason the European expansion has been helpful, as a lot of the stuff we’re buying will be common in both markets from common vendors. Yes, there are still further improvements we can make that we have yet to recognize. We are going to ruthlessly pursue that. This year for us is really going to be all about getting more efficient and reducing our COGS. We've always had a laser focus on operating costs, as everybody knows we're extremely lean. We're looking at COGS now to continuously reduce those without compromising quality. You will receive further gross profit improvement from both things: the more we make and further engineering enhancements.

What can you share about the EV Standard margin profile or strategy? Is it going to be some sort of a new product that you're introducing to the market and what's the right way to think about the margin trajectory of that product versus the margin trajectory of the EV ARC product?

I do not intend for EV Standard to be a loss leader. However, the earliest units we make will be the most expensive. These beta units, which we're producing now for demonstration, will initially carry high costs. We've already identified areas where we will be much more efficient in future models. I am confident that the first units we sell will have good unit economics, and we will rapidly conduct value engineering on the product to widen the revenue-cost gap. I expect to generate more gross from the EV Standard product than from any other product in our lineup. The sales of it may be more complex because, unlike the EV ARC, it’s not something that you can just drop off; it will likely be deployed in network fashion. This may lead to fewer individual sales, but larger volume opportunities.

Do you envision a distribution model, or do you envision a direct sales model?

It's only direct in the beginning, but we are actively pursuing two well-qualified channels in Europe right now. This model is something I’m in favor of. We've faced hesitance in the US due to a variety of reasons although we weren’t ready. Now, we're negotiating with very motivated partners in Europe, and we believe this will greatly impact us as we had a limited number of salespeople. This force multiplication should broaden our audience, and we know people like it when they understand it, so getting it in front of more people clearly benefits us. Once we've successfully integrated this model in Europe, we intend to roll it out in the US as well.

On the $4.3 million non-cash that you mentioned, is the right way to think about it as a 50/50 dilution at the end of this year and next year?

I apologize for belaboring this point, but I speak to those who may not grasp it quickly. This $4.3 million is a current liability. We'll believe it will take place as a result of the 2024 earnouts. 2025 will be a different matter. I can't stress that I hope they hit their earnouts, as their success means our success. We believe they will achieve aggressive targets, and we will continue to assist them to ensure that.

Okay. I appreciate the color. Thank you.

Thank you, Chris.

Thank you. The next question comes from Craig Irwin with ROTH Capital. Please go ahead.

Hello, Craig.

Hey, this is Andrew on for Craig. It's kind of ironic, I saw my first EV ARC in the wild in Manhattan today. So maybe a good sign.

Welcome to the club.

Thank you. A lot has been covered here. I just want to touch on Europe. It looks like you've had some good early progress in the UK. Can you talk about the opportunities there and maybe other specific geographies or countries in the EU that you're excited about?

While I'm thrilled to bits about the UK Ministry of Defence acquiring our product, I'm thrilled to have a contract with the British government, similar to our GSA contract with the federal government. The British Army will now use our products in overseas bases, marking a major milestone for acquisition and growth just months after we closed on that transaction. It took about five years to get our first $1 million order in the US and less than five months to achieve the same in Europe. This signals a rapid evolution in the EV Charging space and interest in the European market. We are also working in the Balkans and Mediterranean regions, which have been fruitful for us due to renewable energy needs and utility scale storage mandates that have recently been established.

Great, well, thanks for the color, and congrats on the strong margin progress. I'll hop back in the queue.

I really appreciate that, thanks.

Thank you. The next question comes from Noel Parks with Tuohy Brothers. Please go ahead.

Hi, Desmond. Good to talk to you. Just a couple things. You've touched on it a bit, but the meetings with potential customers that you had in Serbia, can you characterize the customers a little more and their priorities?

I won't go into too much detail. Those customers are very similar to the profile of those with whom we've had significant success in the US. There is pressure in Europe to electrify transportation as they have laws outlawing the sale of all but zero-emission vehicles in 11 years. A massive undertaking is required to transition from internal combustion vehicles to zero-emission vehicles, which will involve a significant amount of infrastructure. The customers in that region are facing similar challenges as we have in the US. They’re experiencing capacity constraints, difficulties in connecting circuits, and insufficient electricity for electrification and risk mitigation from blackouts. Knowing there is a local solution available is reassuring.

So the natural appeal of the EV ARC and the problems it solves continues on with the EV Standard. Amiga's existing customer base is just the same customers who were purchasing infrastructure, are they the ones who are now going to look at the EV ARCs? Is that sort of translated directly or are you converting those?

I can state categorically that I met with existing Amiga customers who had previously purchased streetlights and presented the new products to them, and met with a very enthusiastic response. This was part of our strategy when we acquired the company. I had a list of qualifications I was looking for, and we got many of them. One was having credibility and previous success with customers of similar profiles to those we have in the US. Yes, existing customers are reintroduced to these new products, and we are seeing significant success. We are getting close on time here, so I think we have time for one or two more.

The next question comes from Christopher Souther with B. Riley. Please go ahead.

Hi, Chris.

Hey, thanks for taking my question here. Maybe just on the margin profile around Amiga and if you can discuss whether that is accretive throughout the year as that ramps up seasonally and some of the other businesses presumably start to ramp up as well?

That's a really good question. The first quarter's gross margins for the legacy business of Amiga typically aren't strong as it tends to be a slower selling time. We didn't see major benefit this quarter as a result. As I keep reiterating, the cross-margin improvement announced comes from the promises kept, and we've executed on substantial improvements that we set out. As we move into the second and third quarters, we'll see volumes rise, and with that, we expect margin improvement. Furthermore, we should see a better cost profile overall due to our enhanced ability to produce products during slow periods, leading to reduced costs when selling increases during busier periods. I'm optimistic about gross profit contributions coming from our European operations as we successfully integrate Amiga.

Excellent. And then maybe just a follow-up here on the EV standard product. Amiga sold streetlights. Can you walk through the plan as you develop the final product? Do you think there will be more traction initially in Europe or in the US for that product? Thanks.

We will be going back to the customers that buy streetlights in general. Every few streetlights should have an EV Standard because charging infrastructure will be required with those. I’m unsure what ratio that is—maybe every fifth or every 50th, but that's a direct sales avenue. We will approach existing EV ARC customers with this new product too. I expect both product sales can coexist successfully depending on placement and use case. We are about two minutes over time here. Operator, do we have more questions? We should wrap.

There are no further questions in the queue at this time.

I'm grateful for everyone listening in and for your support of the company. I feel very enthusiastic. It’s a great time to be Beam Global, and I'm looking forward to the rest of this year. Thank you all.

The conference has now concluded. Thank you for your participation. You may now disconnect your lines.