Beam Global

Good day and welcome to the BEAM Global Year-end 2022 Financial Results and Corporate Update Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Kathy McDormand, CFO. Please go ahead.

Great. Thank you very much. Good afternoon, and thank you for participating in BEAM Global's 2022 year-end 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, and also following that will be a 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 recently filed Form 10-K and other periodic reports filed with the SEC. of this call contains time-sensitive information that is accurate only as of today, March 29th, 2023. 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 for BEAM's fourth quarter and year ended December 31st, 2022. Revenues for the fourth fiscal quarter of 2022 set a new record for the company of $7.9 million, a 126% increase over $3.5 million reported in Q4 of 2021. Revenues for the year ended December 31, 2022, were a record $22 million, a 144% increase over $9 million reported in the same period of 2021. The increase in revenue was driven primarily by increased sales to federal, state, and local customers which has benefited from federal and state funding programs, as well as our GSA contract, which streamlines the contracting process. Revenues have also increased to enterprise customers for fleets and workplace charging, and we also recorded revenues of $5.2 million for our energy storage business from our recent acquisition of AllCell Technologies. Gross loss for the quarter ended December 31, 2022, with $0.7 million, or 9% of sales, compared to 0.3 million or 10% of sales in the same quarter of the prior year. Growth loss for the year ended December 31st, 2022 was 1.7 million or 8% of sales compared to 1 million or 11% of sales in the same period of the prior year. As a percentage of sales, the growth loss is improving primarily due to increased production levels, which resulted in favorable fixed overhead absorption and improved labor efficiency in spite of an increase in material costs for steel and other components due to supply chain shortages and other inflationary pressures, and a $0.8 million increase for non-cash intangible amortization related to purchased assets from the all-seller acquisition. Operating expenses were $7.1 million for the fourth quarter of 2022, compared to $1.7 million for the same period in the prior year. Operating expenses for the year ended December 31, 2022 were $18 million, compared to $5.6 million for the same period of the prior year. The 2022 increases were primarily due to a $5.5 million non-cash increase in the fair value of contingent consideration related to the all-sell acquisition, $3.4 million for the addition of all-sell expenses, $1.6 million for non-cash share-based compensation, $0.7 million for employee compensation, $0.6 million for legal and accounting expenses primarily related to the acquisition, and $0.5 million for sales and marketing costs to support our sales growth. The net loss was $7.8 million or $0.77 per share for the fourth quarter of 2022 compared to $2 million or $0.22 per share for the fourth quarter of 2021. The net loss for the full year 2022 was $19.7 million or $1.99 per share compared to $6.6 million or $0.74 per share for the same period of 2021. At December 31st, 2022, we had cash of $1.7 million compared to 21.9 million at December 31st, 2021. The cash decrease was primarily from increases in inventory and prepayments to vendors, secure battery cells production, as well as the net loss. Our working capital decreased from 24.6 million to 6.8 million from the December 31st, 2021 to December 31st, 2022. The decrease in working capital includes a 6.8 million increase in current liabilities for the change in fair value of non-cash continuing consideration related to the LFL acquisition. And with that, I will turn the phone over to Desmond to provide a business update. Desmond?

Thank you, Kathy. And thanks to all of you for dialing in to listen to this 22 earnings call. Looking forward to answering your questions after I make a few comments about the fantastic year that we just had. and what it means for our future. A couple of months ago, someone who I consider to be one of the best informed analysts in our industry asked me what would be for a normal company a very reasonable question. Should he expect 30% year-over-year growth from Beam Global? I laughed and I said, I bloody well hope not. We've been growing our revenues consistently for many years. The 9 million of revenue reported in 2021 was 45% higher than the 6 million we generated in 2020. And now we've just reported 22 million of revenue for 2022, or about 145% greater than the 9 million we reported in the prior year. At the beginning of the fourth quarter in 2022, we published a contracted backlog of not far off 300% of the full year revenues we were just reported for 2022. So said another way, starting back in 2020, 6 million in revenue, 9 million in 2021, 22 million in 2022, and about three times that much in reported firm contracted purchase orders as of the beginning of the fourth quarter of last year. The 60 plus million in backlog we reported in the fourth quarter by no means tells the full story of the 2022 growth in sales. Actually, our fantastic sales team secured over 76 million of purchase orders in 2022, which was a 548% year-over-year increase over 2021. And 2021 had already been 130% increase in new purchase orders over 2020. We sold over 800 EVR systems in 2022, which is more than all the EVR systems we've sold prior in the 10 years that we've been making the product. In each of 2022's four quarters, the value of the purchase orders we sold was more than 100% greater than the same quarter in the prior year. And in fact, in one of those quarters, we had an increase of 913% over the same period prior year. We had a 300% year-over-year increase in purchase orders of greater than $1 million per purchase order. Dollars, that is. We had an across-the-board reduction in the amount of time it took us to go from initial customer inquiry to a closed purchase order. So we're closing these deals faster, more urgency. In 2022, we made the largest, the second largest, and the third largest sales in our history. 367 EVR systems to the U.S. Army through our partner TechFlow, 140 systems to the Department of Veterans Affairs, and 71 systems to our largest municipal customer, New York City. This was the fourth or fifth order we've received from New York City, and by far the largest so far. Our previous largest purchase order, or rather our fourth largest, was a 52 system order from California's Office of Emergency Services. But then the fifth largest also came in 2022 as well, a 41 unit order from the Department of Homeland Security. There certainly was a lot of government purchasing activity at Beam Global last year. We received orders across all sectors of government, municipal, county, state, and federal. Interestingly, we received over $7 million worth of purchase orders from extensions of both our federal and California contracts. A word of explanation on this. We have a GSA or General Services Administration contract in place with the federal government, and we have a DGS or Department of General Services contract in place with the state of California. Now, normally when you have a federal contract, only federal entities can take advantage of it. And similarly, if you have a contract with the state of California, it's generally only available to government entities in California. But because of our EV charting infrastructure's products continue to operate during blackouts and brownouts, they're designated as disaster preparedness assets. And because of this, the federal government allows its contracting vehicle with Beam Global to be used by any government entity in the United States that cites emergency preparedness as a reason for acquiring our products. The state of California also allows other government entities to use the contract we renewed with them in 2022. Or actually, it was a new contract, but a return to another new contract with them. These perks, which arise from the fantastic value and unique nature of our product offerings, might not sound very impactful on first hearing, but when you realize that just about any government entity across the United States can now buy our products without going through any sort of competitive, time-consuming, and arduous processes, at a time when there's nothing but increasing urgency to deploy EV charging infrastructure, you can perhaps grasp why we've worked so hard to put these types of contracts into place. The proof of the pudding is that the federal and California contract extensions amounted for almost 10% of our sales in 2022. So yes, government contracts were a significant contributor to the fantastic growth we saw during the year, but actually only made up 65% of our total revenues. Only 35% of 2022 revenues came from non-government commercial customers. I would not say that we've seen a full return to pre-COVID revenue percentage mix between government and commercial. But the approximately 1200% year-over-year growth in commercial sales is certainly getting us back to close to where we were before COVID shut down almost all of our commercial business. Don't forget that even with that reduction in opportunities, we still managed to grow our revenues during those very trying periods. I've long been saying that while government tailwinds are important to our business, and indeed to the electrification of transportation in general, I believe that in the end, this will be a consumer-led revolution. The very rapid return of commercial orders that we saw in 2022 certainly does not dampen my enthusiasm for that conviction. And the fact that one or two of our recent commercial wins are with just the sort of customer that I believe might one day potentially become a sponsor of one of our driving on sunshine networks makes me even happier to see this return and continues my belief that we might at some point crack that elusive nut. I'm not aware of any other company in our industry, or in any industry for that matter, that can match our growth in sales. And yet one of two of our less cheerful followers delight in entertaining me with their doom and gloom predictions about our future. Oh, you've grown your sales for five years in a row and you've brought in some huge purchase orders from fantastic customers, says the unhappy soothsayer, but you'll probably never sell anything ever again. Well, and I have a crystal ball with which to combat such a fantastical and insupportable prediction. but I do have the closest thing that Beam Global has to one, our pipeline report, and a pretty damn accurate crystal ball it's turned out to have been. On January 1st, 2022, Beam Global's pipeline was valued at just over $80 million. We then brought in over $76 million of purchase orders in 2022. That is a fantastic pipeline to backlog conversion ratio by anybody's standards. In 40 years of business, I've never seen anything like it. Now, if you follow old doom and gloom's prediction, then we ought to have had something less than 5 million left remaining in the pipeline at the end of the year. In fact, our pipeline at December 31st, 2022 was approximately 120 million. That means that the sales team took an $80 million pipeline, converted 76 million of it into backlog, and then built it back up to over 120 million before the end of the year. And they're working more effectively and enthusiastically, in my opinion, than any time in our history. So much for doom and gloom. The fact is that by any reasonable metric, our sales are growing. And not only are they growing, but that growth is accelerating. That's true for the smaller one and two unit orders, which are actually becoming less and less common. And it's also true for the very much larger orders with price tags in the millions of dollars. I can see no end in sight to this trend. And in fact, anticipate it continually and accelerating further for the next couple of decades. Even our existing large contract vehicles are evolving to further streamline our ability to sell our products. For example, our Federal General Services Administration contract is now accompanied by a blanket purchase authority, or BPA, issued to us in 2022, which adds even more efficiency to the federal purchasing process. The state of California, with whom we've had a contract in place for many years, It issued us a new one in 2022, but with an expanded scope, adding more of our products, so it was already a fruitful contract for us. We make an infrastructure product, and as with any infrastructure solution, it's inevitable that there will be peaks and troughs in our selling cadence. But the very much larger order book that we now have will reduce choppiness in the revenue that we report, because as long as our sales continue to grow at these rates, and I see no end to that, Deliveries will be governed by our ability to continue to produce ever more and more product. We truly now have a supply challenge, not a demand challenge. So can we live up to the supply challenge? In 2021, we manufactured 119 EV arc systems. In 2022, we manufactured 244 EV arcs, 105% increase. In fact, in the fourth quarter of 2022, we produced 103 VR systems, 115% increase over the prior year, and more, in fact, than we produced in any full year prior to 2021. And it wasn't even very far of that full year's production. That's just in the fourth quarter. Just as our ability to sell our products is evolving and accelerating, so too is our ability to produce them. Beam Global's operational team has made excellent advances in adding efficiencies to our processes, and streamlining product throughput in our factory. Our engineering team has been in a near constant process of refining the design to make it easier to build while reducing costs and improving quality. These processes and engineering improvements have not stopped at the factory door. We can also see their impacts out in the field where we deploy. In 2020, it took two human beings to deploy a single EV arc. By 2021, we'd cut that to one person, And then in 2022, we approved upon that again. Through the addition of improved equipment, improved processes, and improved engineering, a single operator is now able to deploy two EVR systems, each of which can support as many as six EV chargers. There's a beautiful and very informative video on the EVR product section of our website, which shows you exactly how we do this. I encourage you to watch that video. Everyone who does is left with a greatly enhanced appreciation of the tremendous and unique value that Beam Global brings to the EV charging industry. There's simply no competitor who can come close to the speed and elegance with which our products provide infrastructure to support our customers' EV charging needs. We're deploying any quality brand EV charger, and often more than one of them, including popular brands like ChargePoint, Blink, Electrify America, and Enel, in less than the time it takes to write the scope of work for a contractor to start digging up your asphalt. Having produced two and a half times more EV arcs in 2022 than we did in 2021, we're now continuing to dramatically enhance our production capabilities because, of course, as I've already mentioned, we have about three times more units currently under contract than we produced in all of 2022, and our sales team continues to be highly active. More or less since our inception, our gross profits have been negatively impacted by fixed overhead allocations imposed as a result of our having facilities which are capable of producing far more product than we were actually selling. This has been especially true in the last few years since we moved to our 53,000 square foot facility just north of San Diego. Carrying that overhead burden would have been a very bad idea if we were in a flat or declining business. But as completely the opposite is the case, the fact that we have a great deal of excess capacity in our facility now seems like a very good idea. I always felt it was. That's why I did it. I'm now very glad to have the growth numbers to support my conviction. Analyzing the various constraints or bottlenecks which might impact our full capacity shows us that there are one or two choke points. The most obvious of those is that we have six final assembly workstations within which our teams pull together all the components and sub-assemblies of an EV arc into the completed product. Each of those workstations, when sufficiently staffed, is capable of producing an EV arc in a little less than a full shift. We're constantly improving upon that, and I believe that we can do quite a bit better. But using that cadence, we can do some simple arithmetic to ascertain what the maximum throughput could be in this facility. With all six workstations fully staffed and operating a single shift five days a week and discounting for all the holidays like Thanksgiving and Christmas, we produce about 1,560 units in a year. Multiplying that by our current ASP would generate just under $110 million in annual revenue. So that's one shift five days a week. Naturally, as we add shifts, we increase that throughput. Two shifts would be $220 million, and three shifts would get us about $330 million or 4,680 systems a year. And again, that's working five days a week and taking off all the holidays, which a normal business recognizes. In theory, if we work three shifts seven days a week, we could produce over 6,500 systems a year. But we don't live in a theoretical world. We have to be practical, which is why I drive my assumptions based upon approximately 4,500 units per year at full capacity. There are other steps we can take to accelerate our throughput, reduce costs, and increase our quality. Identifying certain sum assemblies and components which we manufacture in-house today but might tomorrow have produced by better equipped and more automated contract manufacturers is part of our plan for both reducing costs and increasing throughput without capital expenditure on our part. The whole team here at Beam Global believes that the EVR product is nearing a level of maturity in its development, which should enable us to take advantage of this sort of opportunity. External supply chain constraints can also have an impact on the amount of product we produce each year. And while we can never be entirely certain about what the future will bring in this respect, all of our observations at this point are trending towards reduced risk from supply chain interruptions. We regularly canvas our vendors to hear from them what they're seeing further upstream. We're successfully pushing them for cost reductions, better payments, and also assurance that we'll have access to the components and materials which we integrate into a final product. What we're hearing across the board is that supply chain risks are reducing and that costs, which we've seen consistently rising over the last few years, are plateauing and starting to trend down during the remainder of 2023. We're already starting to see some of those cost reductions in steel and transportation, for example. Of all the vital commodities and components that are essential to the successful completion of our business, or rather operation of our business, there's none more vital than cash. I look at cash in the same way that I look at steel or copper or battery cells or paint or electronic components or even labor. I want to get just the right amount, as much value and quality as I can, and I want to pay as little as I need to. One thing that should be abundantly clear after looking at our filings over the years that I've been running this great company is that I'm very disciplined with both cash and equity. Everyone on the team is. During our earlier years, we had to manage through difficult periods when there was little or no demand for the product and sometimes even less cash to support us as we created a company for the future that we felt so certain would come. Well, that future has come and we're going to be no less disciplined as we manage through these fantastic opportunities. Taking a look at our 12-31-2022 balance sheet, you'll see that we had cash of about 1.7 million, but we also had 4.5 million in AR at that time, and we always get paid. We showed a total current assets of 20 million made up of cash, accounts receivable, prepaid expenses, and crucially, inventory. These are all things that we convert back into cash in a generally short period of time. Our total current liabilities were 13 million, but that included almost 7 million in a contingent consideration for an earn-out payment as a result of the excellent performance of the battery company we acquired last month, non-cash. Performance-based earn-out payments are about as strong an indication as you can get the good value of a decision to make an acquisition. But to get an accurate picture of our financial health, it's best to look at the 20 million in current assets, discounted by the current liabilities, subtracting the contingent consideration. I'll give you the arithmetic for you. You take 20 million in cash, AR, prepaid expenses and inventory, all of which is pretty much the same as cash to us, and subtract $6 million of current liabilities derived by subtracting the $7 million contingent consideration from the $13 million, the answer you'll come up with is about $14 million of cash or stuff that we're going to turn into cash within the next few months. Quite a different picture. Now, let's look at what this $14 million in cash means to us. Total cash used in operations during 2022 was 18.1 million, as we've reported it. But that included 8.2 million in increased inventory, 600,000 in increased receivables, and about 800,000 in prepaid expenses and other assets, which, as I've already explained, essentially equate to cash for us. Again, doing the arithmetic for you, what that will show you is that the cash we actually burned, in other words, spent on stuff that will not turn back into cash again during the next few months, was about 9.5 million during all of 2022. That comes to less than 2.5 million a quarter. And remember that we closed an acquisition and integrated a formerly privately held company into the Beam Global family during that time. Taking that more or less 14 million in cash and stuff that we're going to turn into cash and dividing it by the 2.3 million, which is what we actually burned during 2022, you can see that we could operate for at least six more quarters without raising capital or doing anything else. And that's if our cash burn remained the same. This is also assuming that we get no gross margin contribution from our sales. But actually, we do get a contribution margin every time we sell an EVR. So the more than we sell, the less we should have to rely on our current assets to cover our overheads. More on that in a minute. Having excellent discipline where cash and equity is concerned is, in my opinion, very important to the long-term value creation of being global, for which I'm ultimately responsible. Nevertheless, it's possible to be penny-wise and pound-foolish. We're experiencing extraordinary growth, and I don't want to allow anything to get in the way of our executing on that growth. So while it's true that with disciplined cash management, we can continue to operate and grow for the foreseeable future, I've also taken steps to make sure that we have cash available to us to accelerate and lubricate our growth. Just last week, we announced a $100 million credit facility. to provide the kind of flexibility that we may need to prevent lack of cash being any kind of impediment to our rapid growth. We've spent a great deal of time researching debt and credit facilities and looking at other financing mechanisms which might be available to us. I can say with total confidence that I know of no other financing mechanism that could come close to competing with the facility we've closed with the London-based OCI group. As an investor myself, I know to be skeptical when reading the headlines of financings done by others. The devil is in the details, and there always seems to be some aspect of the deal which, as an investor, one wished did not exist. Well, I can tell you that the OCI $100 million credit facility is as simple and as clean as we have described it. What you see is what you get. There are no fees, no origination discounts, no underutilization penalties, no equity considerations, and no hidden gotchas anywhere in the deal. If and when we deem fit, we're able to bridge short-term cash deficiencies with this credit facility, and all we will pay is SOFR, or the secured overnight financing rate, plus 300 basis points. It's as simple as that. This was not an easy win. It took OCI and I, working in good faith, over four months to close this deal. As is often the case, arriving at a simple and clean conclusion takes longer than signing any old agreement earlier in the process. The reason that OCI is such an excellent fit for us stems from their extensive history of identifying where the real risks lie amongst the counterparties to the sort of sales transactions into which we will enter. Not by accident, Beam Global has targeted the highest quality and most credit worthy customers in the world. We have an impeccable history of delivering the products that our customers have ordered and an equally impeccable history of getting paid. Any typical funding institution would have based their underwriting decisions on Beam Global's profile and done whatever they could to leverage our need into an opportunity to take whatever they could get from us. OCI looked at our technology our history of delivering our technology, and the credit profiles of our customers. As Oliver Chapman, OCI's CEO, said in our press release last week, it's this beautiful combination which enables OCI to provide us with a meaningful credit facility at pricing and terms which would normally be reserved for blue chip entities. I stress again that we have a $100 million line of credit available to us at SOFR plus 300 basis points. There are no other hidden fees or mechanisms resulting from this facility. Please ask me questions during the Q&A session if this is not entirely clear to you. We'll continue to manage the cash and current assets on our balance sheet with the same high degree of discipline and care that we always have done, but we will not allow excessive prudence to slow our rate of growth. The OCI facility gives us the additional flexibility we need to free our operations teams to execute on the incredible opportunities that our sales teams are creating. Credit and discipline will always be important to us, but they alone will not make us the very profitable company that I believe we will become. Getting to profitability is, in many ways, the least mysterious aspect of our business. It's quite simple. Make enough money on enough products to cover all our overhead expenses, with some left over. The more that's left over, the better. The first step in that process is, of course, gross profitability, according to GAAP. But there's an essential step to get to that important milestone, and that is positive unit economics. If the variable cost associated with producing each of our products is less than the payment we receive from our customers who buy them, then we receive margin contribution from each of the units that leave our factory. I have reported often that our unit economics are positive. We are not a company that loses more when we sell more. We are the opposite. At a certain point, the margin contribution from the increasing volumes of product that we sell are sufficient to overcome the fixed overhead allocations with which we must also burden our costs of goods sold. When unit economics are positive, Increasing volume alone, when sufficient, will eventually lead to gross profitability. Reducing variable costs, such as the bill of materials and labor hours to produce the product, further improve gross profitability. We are doing all of these things. And the very positive result of these activities is that in the fourth quarter of 2022, our EV arc product line actually broke even at the gross margin line. A big contributor to the variable cost management for an EV arc is the fact that we're now producing our own batteries in our Chicago facilities. If we were still buying batteries from outside suppliers, we would have had to have absorbed all the cost increases which inflation and supply chain constraints have exerted on that industry, not to mention their margins. While we've also experienced cost increases, because we're making batteries ourselves, the impacts have been far less severe. Beam Global's approach to making our own batteries is, as far as I'm aware, unique in the industry, and it's playing an important role in our increasingly improved profitability. Our four-year gross margin for 2022 came in at about negative 7.5%, which is a 3.5% continued improvement over 2021 gross. Remember that we've improved our gross profit even in the face of the most inflationary environment that has existed in the United States for over 40 years and without increasing our prices. we face significant increasing costs of almost every material and component that we buy. This is true for all the products in our portfolio, whether they're energy storage or EV charging products. As I've already noted, we've experienced significant increases in the cost of components that go into our batteries, and yet they have still contributed to significant cost savings over the non-beam global auctions. It's also important to note that about 839,000 reported in our cost of goods sold was actually depreciation and amortization of intangible assets related to our acquisition last year, and not actually directly part of the variable costs associated with making our products. Removing these non-cash items from our cost of goods sold takes our gross loss from 7.5% to about 3.5%. A 3.5% pro forma gross loss, backing up the non-cash items, shows a pro forma gross profit improvement of over 7% when viewed against our 2021 results. Remember that this improvement has come a time, again, when we've seen nothing but cost increases across the board of materials and components we buy. Improvements in gross profitability have come as a result of increased volumes offsetting our fixed overhead as well as efficiency and engineering improvements. I track revenue per employee and revenue per laborer, and I'm seeing very distinct improvement in these metrics. I can sum this up by just saying that we are getting very much better at what we do. Another particularly graphic example of this is that we're producing about 10 times more kilowatt hours of batteries today than the company we acquired was in the month before it became part of Beam Global. We're in the same buildings and paying the same rent, and while we have increased headcount to accommodate our growth, we've not done so at anywhere near the same rate that we've increased revenues and productivity. Nowhere is this more true than when comparing revenues to overhead employees, where the growth has been even more pronounced, demonstrating the level of operating leverage that we have. Our actual operating expenses are much lower than we've reported when we take out about $8.4 million of non-cash items, such as the contingent consideration for the earn-out and some stock options and other non-cash items that are removed for comparison's sake. Removing these non-cash items, again, for comparison's sake, takes our operating expenses from 82% of revenue to 44% and also demonstrates almost 20% of improvement over 2021 results. So if you look at growth and net, be careful to understand that the acquisitions that we have done have added a lot of non-cash items, make the numbers look much worse than they actually are from an improving the business point of view. We need to continue to do a good job of analyzing these numbers because I think it's very unlikely that all cell technology will be the last acquisition that we make. On the contrary, I'm actively seeking opportunities to continue our inorganic growth while we knock it out of the park with organic growth. Buying this battery company and integrating it into Beam Global has been an excellent move for us on many levels. I've already discussed the significant savings that we've experienced as a result of not having to buy batteries from outside providers, but there are so many other positive aspects to this transaction. Part of the integration has been combining our marketing efforts and investing in more energy storage salespeople. We received over 8 million of energy storage orders during 2022, and our team did an excellent job of growing a new piece of our business while ramping up to supply all of our internal needs for batteries. Again, 10 times more kilowatt hours than when we bought them. The integration of the teams, which is never an easy thing after an acquisition, has gone very well. In fact, we have engineers from Chicago in our San Diego office this week. and the sharing of knowledge and experience and expertise across all the many areas of both our battery and EV charging infrastructure products has already contributed significantly to material improvements. We bought AllCell to reduce our costs, increase our revenues, defend our supply chain, and increase barrier entry for the competition. And we've seen quantifiable results in each of these areas over the last year. I will continue to look for other opportunities where I can acquire talent, technology, complementary offerings, and most especially for me at the moment, geographic expansion. One of the benefits of closing the OCI credit facility is that we now have a major European forward-thinking fund involved in our success. I've already stated how important I think the credit facility will be for us, but I also believe that having a strong and well-connected ally in Europe is going to be very helpful for us. I've visited Europe several times over the last couple of quarters, and I continue to feel enthusiastic about our opportunity to expand into the largest automotive market in the world, where I believe that our products may experience even more rapid growth and adoption than they are in the United States. I can tell you that I've already had discussions with OCI management, which go beyond the nuts and bolts of the credit facility. Europe's not the only international market which I believe holds prominent for us. I'm also looking at opportunities in another region, which I think could provide meaningful growth opportunities. And these activities are processes. They're not single events. They take time and a lot of work if they're to be done correctly. Some would have me rush into closing on the first opportunity which is presented to me. I will not do that. I will continue to seek out only opportunities and transactions which makes the best long-term sense for Beam Global, our shareholders, our customers, and our employees. The Beam team, has consistently shown that it can hit even the most aggressive goals it sets itself. I'm determined that international expansion will be another example of our succeeding. A part of doing future acquisitions right will mean balancing the use of cash versus equity when negotiating a deal. The AllSell transaction was a purely stock-based deal, and I believe it's worked out very well for Beam Global shareholders as well as for the sellers of AllSell. This is the way that these things are supposed to work. I'll endeavor to achieve win-wins with any transaction that I work through. There may be instances where it makes sense to use cash or equity or a combination of cash and equity. In either event, there will likely be some element of dilution. This is where our fantastic and historic discipline with equity issuance becomes even more of a trump card. The fact that we have about 10 times less shares outstanding than any public company that could be described as a peer means that we'll be able to grow our company using equity adding market cap, revenues, barrier to entry, geographic expansion, whatever else we might get from an expansion, while still having a far lower number of shares outstanding than our peers. If you're afraid of dilution, don't be. My job is not to maintain or increase your percentage holdings in Green Global. That's your job. My job is to increase the value of the shares that you hold. And if I and the board and all the other experts in our sphere agree that issuing equity to accelerate the growth of the company will increase shareholder value, then you can bet that I'll do it. We're entering a period of extraordinary growth in the industries which we target. The electrification of transportation and energy storage are just at the very beginnings of what will be, in my opinion, decades of growth. Just look at all the fantastic new electric vehicles which are hitting the market. Just look at all the regulations and investments made by governments around the world. Just look at the ever-increasing numbers of alarming reports from bodies like the UN and others, which those governments are using to inform their investments and regulations. Think of all the robots, drones, submersibles, micromobility, and other devices which will need safe and energy-dense solutions like those which we now produce. Just think of the fact that all of Beam Global's success today has been derived from one single market. Europe, the Middle East, and the rest of the world can benefit as well, if not better, from our products than the United States. The opportunities ahead of us are breathtaking. We will get better and better at producing and delivering our current products. We will introduce our future products like our EV standard and our UAV arc and all of the continued innovations I expect from our battery experts to markets which are hungry for innovative problem solving solutions like ours. We will continue to improve our profitability just as we have done even through this inflationary period. This is not the time to be timid about growth. This is not the time to stop investing in our future. We've demonstrated that we can take very little and turn it into a great deal. We've demonstrated that from tiny beginnings, we can create a meaningful platform. Now that we're standing on that platform, just imagine where we'll take it next. I'm thrilled and proud of what we've done so far, but I know that we're only just getting started. Now, it would be rude of me not to say hello to the shorters. This would be a great time for you to listen up. because I'm going to summarize. We have fantastic mass-producible, patented products addressing a massive and paradigm-shifting global infrastructure build-out. We have a made-in-America product at a time when state and federal investment is bigger than it's ever been, and it's being directed more than ever at American products. We have triple-digit growth in sales and triple-digit growth in production. We're improving our profitability against a tide of inflation, And that's a tide that will turn. We have plenty of room to grow and aggressive plans to expand in both the United States and internationally. We have no debt. We have great discipline where cash and equity is concerned and access to $100 million of cheap, non-dilutive and rapidly available credit. We are executing on every front and we have no indication that any of this is going to slow down at all. Quite the opposite. It's an absolutely brilliant time to be Beam Global. And now I look forward to answering your questions.