Financial Performance - Revenues for the first six months of 2024 were $29.4 million, a 5% decrease from $30.8 million in the same period of 2023[84] - Revenues for Q2 2024 decreased by 17% to $14.8 million from $17.8 million in Q2 2023, with federal customer revenues down by $5.1 million[94] - For the six months ended June 30, 2024, revenues decreased by 5% to $29.4 million compared to $30.8 million in the same period in 2023[97] - Gross profit for the first half of 2024 was $3.8 million, or 13% of sales, compared to a gross loss of $0.5 million, or 2% of sales in the same period in 2023[98] - Gross profit improved to 15.9% in Q2 2024, up from 13.1% in Q2 2023, with a non-cash expense adjustment resulting in a gross profit of 17.1%[91] - Gross profit for Q2 2024 was $2.4 million, representing 15.9% of sales, an improvement of 13.1 percentage points from 2.8% in Q2 2023[95] Operating Expenses - Total operating expenses for Q2 2024 were $7.1 million, or 48% of revenues, up from $4.0 million, or 23% of revenues, in Q2 2023[96] - Total operating expenses for the first half of 2024 were $11.7 million, or 40% of revenues, compared to $7.9 million, or 26% of revenues, in the same period in 2023[99] Cash Flow and Capital Needs - Cash used in operating activities for the first half of 2024 was $0.1 million, significantly reduced from $5.1 million in the same period in 2023[100] - The company may need to raise capital until it achieves positive cash flow, with a Common Stock Purchase Agreement allowing for the sale of up to $30 million in common stock[107] - The company has a supply chain line of credit with OCI Limited of up to $100 million, but has not drawn on this line of credit to date[106] Market and Product Development - The acquisition of Amiga in October 2023 expands Beam's presence in the European market and enhances production and engineering capabilities[83] - The commercial, non-government revenues increased from 14% to 24% of total revenues from the first half of 2023 to the first half of 2024[84] - Beam's patented renewable energy products significantly reduce installation costs and complexity compared to traditional grid-tied alternatives[85] - The company expects continued growth in the electric vehicle market, which will drive demand for EV charging infrastructure[86] - Beam All-Cell battery technology is being integrated into EV ARC™ products, enhancing energy density and safety[82] - The company is developing new products, including BeamSpot™ and UAV ARC™, which leverage proprietary technology to expand market offerings[90] - The company anticipates further reductions in production costs due to operations in Serbia, which are expected to be less expensive than U.S. manufacturing[91] Internal Controls and Compliance - The company identified material weaknesses in internal controls over financial reporting as of June 30, 2024, due to inadequate program change management and user access controls[110] - During Q4 2023, the company implemented the NetSuite ERP system to automate operations and accounting for San Diego and Chicago locations, but did not ensure proper segregation of duties[111] - The company noted that many reports and reconciliations were performed in Excel without adequate validation of segregation of duties between preparers and approvers[111] - Management is actively working to remediate the identified material weaknesses and has taken various actions to strengthen internal controls over financial reporting[113] - The company plans to continue reviewing access in NetSuite ERP to ensure proper segregation of duties and provide additional training for employees[115] - Staffing levels and expertise are being increased to support enhancements in controls and procedures surrounding documentation and reconciliations[115] - The company aims to manage segregation of duties between preparers and approvers of reconciliations, including hiring additional staff[115] - The material weaknesses will be considered remediated once management concludes that the applicable remedial controls are effectively designed and operating[114] - The company has acknowledged that the identified weaknesses have a pervasive effect across the inventory transaction cycle[112] - Management may decide to take additional measures to address control deficiencies or modify remediation measures as necessary[114]
BEAM GLEQ.WARRT(BEEMW) - 2024 Q2 - Quarterly Report