Financial Analysis

4. BUSINESS COMBINATIONS AND JOINT VENTURES Telcom On August 30, 2024, the Company acquired Telcom d.o.o Beograd (Telcom), pursuant to a Share Sale and Purchase Agreement dated as of August 30, 2024 ( the Agreement) with the owners (the Sellers) of Telcom. Telcom is a business located in Serbia and engaged in the manufacturing of telecommunications equipment. Beam Global acquired all of the equity stock of Telcom from the Sellers in exchange for cash and Beam Global common stock. The total purchase price was subject to adjustment based on the amount of cash held by Telcom at closing. Based on Telcoms cash balance at closing equal to approximately EUR 220,298, Beam Global paid to the Sellers a purchase price equal to EUR 815,298 which was paid to the Sellers as follows: (i) EUR 430,000 cash and (ii) issued 82,506 shares of Beam Global common stock. At closing, Telcom had a positive working capital balance of approximately EUR 500,000 which consisted of (i) a cash balance equal to EUR 220,000, accounts receivables of approximately EUR 115,000, inventory of approximately EUR 275,000 and accounts payable of approximately EUR 110,000. In addition to the above payments, the Telcom Sellers were eligible to earn up to EUR 250,000 (the Earnout Cap) in additional shares of Beam common stock if Telcom meets certain revenue milestones for fiscal years 2024 and 2025 (the Telcom Earnout Consideration). The Telcom Earnout Consideration that the Telcom Sellers were eligible to receive for 20 …

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10. COMMITMENTS AND CONTINGENCIES Legal Matters: The Company may from time to time become party to actions, claims, suits, investigations or proceedings arising from the ordinary course of our business, including actions with respect to intellectual property claims, breach of contract claims, labor and employment claims and other matters. Any litigation could divert management time and attention from the Company, could involve significant amounts of legal fees and other fees and expenses, or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations. Actions, claims, suits, investigations and proceedings are inherently uncertain, and their results cannot be predicted with certainty. We are not currently involved in any legal proceedings that we believe are, individually or in the aggregate, material to our business, results of operations or financial condition. However, regardless of the outcome, litigation can have an adverse impact on us because of associated cost and diversion of management time. As of December 31, 2025 , after consulting with legal counsel, management believes there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

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Twelve Months Ended December 31, 2025 2024 Product sales $ 24,351 $ 46,057 Maintenance fees 304 129 Professional services 2,912 1,127 Shipping and handling 728 2,266 Discounts and allowances (59 ) (243 ) Total revenues $ 28,236 $ 49,336

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8. GOODWILL AND INTANGIBLE ASSETS Intangible assets, net as of December 31, 2025 and 2024 consists of the following : December 31, 2024 Weighted- Gross Net average Carrying Accumulated Carrying Amortization Amount Amortization Amount Period (yrs) Developed technology $ 8,074 $ (2,080 ) $ 5,994 11 Trade name 1,756 (498 ) 1,258 10 Customer relationships 444 (158 ) 286 13 Backlog 185 (185 ) - 1 Patents 576 (77 ) 499 20 Intangible assets $ 11,035 $ (2,998 ) $ 8,037 December 31, 2025 Weighted- Gross Net average Carrying Accumulated Carrying Amortization Amount Amortization Amount Period (yrs) Developed technology $ 8,074 $ (2,814 ) $ 5,260 11 Trade name 1,756 (673 ) 1,083 10 Customer relationships 444 (199 ) 245 13 Backlog 185 (185 ) - 1 Patents 640 (101 ) 539 20 Intangible assets $ 11,099 $ (3,972 ) $ 7,127 Amortization expense for each of the years ended December 31, 2025 and 2024 was $1.0 million. Amortization expense for intangible assets held as of December 31, 2025 will be $ 1.0 million for each of the years 2026 2028. For both years ending December 31, 2025 and December 31, 2024 , amortization expense recognized in Operating expenses was $0.2 million and $0.2 million respectively and $0.8 million and $0.7 million in Cost of Good Sold respectively. The Companys acquisitions identified Goodwill and intangible assets. Goodwill represents the purchase price in excess of fair values assigned to the underlying identifiable net assets of the acquired business. Goodwill as of Decem …

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14. INCOME TAXES The provision for income taxes consists of the following: 2025 2024 Current: Federal - - State $ 10 $ 14 Foreign (164 ) 199 (154 ) 213 Deferred: Federal - - State - - Foreign (252 ) (307 ) (252 ) (307 ) Net benefit $ (406 ) $ (94 ) The components of loss from continuing operations before provision for income taxes consists of the following: Year Ended December 31, 2025 2024 United States $ 19,975 $ 10,537 International 7,434 839 Total $ 27,409 $ 11,376 The Companys tax expense differs from the expected tax expense for Federal income tax purposes, (computed by applying the United States Federal tax rate of 21% to loss before taxes). The following is a reconciliation of the Companys effective tax rate on income and the statutory rate for the year ended December 31, 2025. December 31, 2025 $ % Tax benefit at the U.S. statutory rate $ (5,756 ) 21.00 % State and local income tax (net of FBOS) 457 (1.67) % Change in Valuation Allowance 3,598 (13.13) % Nontaxable or nondeductible items (5 ) 0.02 % Foreign tax effects: Serbia: Goodwill impairment 995 (3.63) % Rate differential 446 (1.63) % Prior year deferred true-up (223 ) 0.82 % Other (73 ) 0.27 % Other: Prior Year True-Up 155 (0.57) % Total $ (406 ) 1.48 % As previously disclosed, prior to the adoption of ASU 2023 - 09, the difference between the provision (benefit) for income taxes and the amount computed by applying the U.S. federal income tax rate for the year ended December 31, 2024 is as follows: Year Ended D …

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11. LEASES On September 1, 2020, the Company entered into a five -year operating lease for their headquarters building in San Diego, California. The term of the existing lease was extended until February 28, 2026 and subsequently until September 30, 2026. The agreement also provides that the Landlord may terminate the lease upon sixty ( 60 ) days prior written notice to the Company. At this time, it is not reasonably certain that the Company will extend the term of the lease and, therefore, the renewal periods have been excluded from the right-of-use (ROU) asset. As part of the All Cell acquisition, the Company assumed a facility lease located in Broadview, Illinois, and recorded $0.2 million in right-of-use asset and lease liability. The lease term ended on August 31, 2023 and contains clauses for annual rent escalation. The present values of the lease payment streams were calculated using an effective borrowing rate of 10%. The Company remained in the facility on a month-to-month lease and then entered into a five -year lease extension effective February 1, 2024 and recorded $1.4 million in right-of-use asset and lease liability. As part of the acquisitions in Serbia, the Company assumed a lease for a small office and a few minimal leases in Belgrade, Serbia, which have an indefinite term and may be terminated at any time with 30 days notice. Because of the short term and small value, these leases were not capitalized. During the twelve months ended December 31, 2025 and 20 …

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"RECENT ACCOUNTING PRONOUNCEMENTS Recently adopted pronouncement s In December 2023, the FASB issued ASU No. 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures (ASU 2023 - 09 ). ASU 2023 - 09 requires disaggregated information about a companys effective tax rate reconciliation and information on income taxes paid. The standard is effective for Beam beginning with our annual financial statements for the fiscal year ending December 31, 2025. Early adoption is permitted. We adopted this ASU prospectively on January 1, 2025. See Note 14. Income Taxes In July 2025, the FASB issued ASU No. 2025 - 05, ""Financial Instruments - Credit Losses"" (""ASU 2025 - 05"" ), to introduce a practical expedient for all entities, which simplifies the calculation required for estimating credit losses and assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025 - 05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods; however, early adoption is permitted. ASU 2025 - 25 allows for adoption using a prospective method. The Company early adopted this standard as of January 1, 2025. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. Recent pronouncement not yet adopted In October 2023, the FASB issued ASU 2023 - 06, Disclosure Improvements (ASU 2023 - 06 ), which …

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13. REVENUES For each of the identified periods, revenues can be categorized into the following: Twelve Months Ended December 31, 2025 2024 Product sales $ 24,351 $ 46,057 Maintenance fees 304 129 Professional services 2,912 1,127 Shipping and handling 728 2,266 Discounts and allowances (59 ) (243 ) Total revenues $ 28,236 $ 49,336 During the year ended December 31, 2025 and 2024 , 29% and 62% of revenues were derived from federal, state and local governments, respectively. In addition, 40% of revenues in the ye ar ended December 31, 2025 were international sales compared to 25% in the prior year. At December 31, 2025 and 2024 , deferred revenue was $2.5 million and $1.6 million, respectively. These amounts consisted mainly of customer deposits in the amount of $1.5 million and $0.6 million for December 31, 2025 and 2024 , respectively and prepaid multi-year maintenance plans for previously sold products which account for $1.0 million and $1.1 million for December 31, 2025 and 2024 , respectively, and pertain to services to be provided through 2035 . Revenue recognized during the year ended December 31, 2025 and 2024 which pertained to revenue deferred in prior years was $ 0.1 million and $1.0 million respectively. The balance of contract assets is driven by the difference in timing of when revenue is recognized from performance obligations satisfied in the current reporting period and when amounts are invoiced to the customer. The balance of contract liabilities is driven by …

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15. SEGMENT REPORTING The Company has a single reportable segment focused around providing clean-technology innovation focused on providing high-quality, renewably energized products. The Companys chief operating decision-maker (the CODM), who is the Chief Executive Officer, assesses performance for the reportable segment and decides how to allocate resources using net income (loss) as the primary measure of profitability. The CODM is not regularly provided with specific segment expenses, but focuses on revenue, gross profit, and net income. Expense information, including cost of sales, can be easily computed from the provided information. These segment (and consolidated) measures of profitability are shown in the statements of operations. The measure of segment assets are reported on the balance sheets as total assets. …

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12. STOCKHOLDERS EQUITY Stock Issued for Acquisitions The Company issued 82,506 shares of its common stock upon acquiring Telcom during the year ended December 31, 2024. See further discussion in note 4. Business Combination. Committed Equity Facility In 2022, the Company entered into a Common Stock Purchase Agreement and Registration Rights Agreement with B. Riley Principal Capital II, LLC under which the Company issued 281,157 shares for approximately $3.0 million. As consideration for B. Rileys commitment to purchase shares of the Companys common stock, the Company issued B. Riley 10,484 shares of its common stock in both September 2022 and April 2023. The facility was terminated on October 1, 2024. The Company issued 281,157 shares under the Purchase Agreement for $3.0 million in proceeds, of which $0.5 million was offset by the offering costs as of December 31, 2024. Awards Under Stock Incentive Plans On June 9, 2021, the Companys stockholders approved the Beam Global 2021 Equity Incentive Plan (the 2021 Plan) under which 2,000,000 shares of the Companys common stock are allowed to be issued pursuant to the exercise of stock options or other awards granted under such plan in addition to the 630,000 shares previously allowed under the Beam Global 2011 Stock Incentive Plan. The number of shares reserved for issuance under the 2021 Plan will increase automatically on January 1 of each of 2022 through 2031 by the number of shares equal to 5% of the aggregate number of outsta …

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16. SUBSEQUENT EVENTS Management has evaluated events that have occurred subsequent to the date of these condensed consolidated financial statements through the date of filing. Based upon this review, the Company identified the following subsequent event that requires disclosure but did not require adjustment to the financial statements. In February 2026, the Company entered into an agreement to extend its lease in San Diego for an additional seven -month period, through September 30, 2026. On April 7, 2026, the Company executed an Amended and Restated Employment Agreement with Desmond Wheatley, President and Chief Executive Officer.

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