Beam (US:BEEM)2021-03-29 16:00Market Opportunities - Beam's renewably energized products target three significant markets with annual global spending in the billions: electric vehicle charging infrastructure, outdoor media advertising, and energy security[17] - The electric vehicle (EV) infrastructure market is projected to receive $6 trillion in investments by 2040, with an expected 559 million EVs on the road by that year[43] - California has mandated that all new cars and passenger trucks sold will be zero-emission vehicles by 2035, with Washington State implementing a similar ban starting in 2030[41] - The company anticipates significant growth in the electric vehicle market over the next decade, positioning its products to benefit from this trend[137] Product Offerings - The EV ARC™ product is the world's first transportable, solar-powered EV charger, capable of charging between one and six EVs simultaneously and providing charging to as many as 12 parking spaces[21] - The EV-Standard™ product, currently in development, will utilize existing streetlamp foundations and grid connections to provide Level II EV charging, enhancing urban EV charging solutions[28] - Beam's products are designed to operate during grid outages, providing a reliable source of EV charging and emergency power, which is increasingly important as reliance on electricity grows[22] - Beam's products can significantly reduce greenhouse gas emissions, which may incentivize corporate sponsorships for the EV ARC™ systems[30] - Beam's products are designed for rapid deployment, offering a lower total cost of ownership as they do not incur utility bills for energy[64] - Beam's EV ARC™ can be deployed in remote locations without grid connections, providing flexibility and reducing installation costs compared to traditional grid-tied chargers[66] - The patented BeamTrak™ solar tracking solution increases energy generation by up to 25% compared to fixed arrays, enhancing product differentiation[66] Collaborations and Contracts - The company has entered a collaboration agreement with the City of San Diego to deploy solar-powered EV charging infrastructure across the city, known as the Driving on Sunshine network[32] - Beam has secured major contracts with the City of New York totaling approximately $5.7 million for EV ARC units, and a $2 million contract with Electrify America for 30 units[52][55] - The California Department of General Services contract has an estimated value exceeding $20 million, allowing various state agencies to purchase Beam's products[54] - The company aims to create a long-term recurring revenue stream through five-year sponsorship agreements for the Driving on Sunshine network, similar to the Citibike program in New York City[31] Financial Performance - Revenues increased from $5.1 million in 2019 to $6.2 million in 2020, with a more diversified customer base including municipalities, colleges, and federal customers[137] - For the year ended December 31, 2020, the company's revenues were $6,210,350, an increase of $1,098,805 or 21% compared to $5,111,545 in 2019[159] - The company reported a gross loss of $710,974 for the year ended December 31, 2020, which was an increase from a gross loss of $153,774 in 2019, representing 11% of net revenues in 2020 compared to 3% in 2019[160] - Total operating expenses increased by 44% to $4,496,660 for the year ended December 31, 2020, compared to $3,117,793 in 2019[162] - The company reported a net loss of $5,213,025 for the year ended December 31, 2020, compared to a net loss of $3,933,922 for the same period in 2019, reflecting an increase in losses of approximately 32.6%[166] - Cash provided by financing activities increased significantly to $27,350,387 in 2020 from $8,541,358 in 2019, representing an increase of approximately 219.5%[164] - The company's cash balance rose to $26,702,804 at December 31, 2020, compared to $3,849,456 at the end of 2019, marking an increase of approximately 694.5%[167] Operational Challenges - The company faces intense competition in the solar renewable energy and EV charging industries, with competitors having greater resources and market recognition[81] - The company may need to raise additional capital to sustain operations and fund investments, as it expects to incur further losses in the foreseeable future[76] - The company is subject to extensive government regulations, which could impact operations and financial results if changes occur[71] - The company has identified a material weakness in internal control over financial reporting, which could adversely affect its ability to report financial results accurately[115] - The company relies on key personnel, including CEO Desmond Wheatley, and the loss of such individuals could adversely affect operations and competitive advantage[93] - The company sources materials from various vendors, but reliance on single suppliers for certain components poses risks to operational profitability[99] Future Outlook - The company anticipates improvements in gross profit as revenues grow, driven by increased production volumes and cost efficiencies[174] - The company plans to outsource certain components and sub-assemblies to reduce costs and increase gross margins and factory output[161] - Management plans to enhance operations through the addition of sales personnel, cost management, and improved vendor negotiations to achieve profitable growth[175] - The company is focused on expanding its geographic footprint and customer base, currently operating in 23 U.S. states and three international countries[43] - Beam anticipates that the demand for EV charging infrastructure will grow more rapidly than current forecasts suggest, necessitating faster deployment of their products[42] Internal Controls and Governance - The Company identified material weaknesses in internal controls over financial reporting as of December 31, 2020, due to the lack of automated manufacturing and purchasing systems[188] - The effectiveness of internal control over financial reporting has not been audited due to the Company being exempt as a smaller reporting company[190] - The Company aims to strengthen internal controls and governance requirements following the identified weaknesses[189] - The Company has hired a Director of Operations and a Director of Engineering to assist with inventory management and strengthen controls[192] - The Company plans to decide on an Enterprise Resource Planning (ERP) system in the first half of 2021 to enhance inventory management[192] Risks and Uncertainties - Significant developments in alternative technologies could adversely affect demand for the company's offerings, potentially leading to product obsolescence and loss of market share[87] - Defects or performance issues in products may result in customer loss, reputational damage, and increased warranty claims, impacting revenue and operational results[88] - Compliance with environmental laws may increase costs for customers, potentially deterring purchases of certain products[107] - The company's media branding strategy may not yield profitable operations, as success depends on securing sponsorships and advertising deals[103] - The company's ability to sell branding opportunities is contingent on the availability of real estate and municipal approvals, which could impact financial results[109]