Good day, everyone, and welcome to the Beam Global Full Year 2023 Operating Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Lisa Potok, CFO. Please go ahead.

Hello. Good afternoon, and thank you for participating in Beam Global's 2023 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 followed by a Q&A 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 beams 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. The content of this call contains time-sensitive information that is accurate only as of today, April 17, 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 for Beam's fourth quarter and year ended December 31, 2023. Revenue for the first -- for the fourth fiscal quarter of 2023 set another new record for the company of $20 million, a 154% increase over the $7.9 million reported in Q4 of '22. Revenues for the year ended December of '23, were a record $67.4 million, which was a 206% increase over the $22 million reported in the same period ending 2022. This increase was primarily due to sales to federal state and local customers as a result of large orders received in late 2022 for the U.S. Army, Veterans Affairs, New York City and more. We recorded revenues of $8.5 million…

Okay. Thank you very much, Lisa, and thanks to all of you for joining Beam Global's 2023 Earnings Call. There's a great deal to go through. So I'm going to talk quickly so that I can be sure to leave some time for questions after my prepared comments. First, let me start by apologizing that were a little late with this earnings call but we did file within the extension period and we're not actually late with our filings. I also apologize for the short notice, we've been working very hard to get the filings out, and I didn't want to notice the call until we were certain that we were going to do that, of course. 2023 was a very busy year for us with many initiatives coming to a head in the fourth quarter, which have created a lot of extra hard labor, frankly, where the filing of our 10-K was concerned. Let me reassure you that there was nothing controversial about it. It's just that we had a new CFO, a new accounting team joining our veterans, a new auditor, a new ERP and an international acquisition, which all hit in the fourth quarter. Now while all of these things have been planned and are, frankly, very good for the company, it was never our intention to take them all on in the same quarter and certainly not in a fourth quarter. However, things turning out as they inevitably do, that's where we ended up, and we've had to deal with it. We might have been able to deal with it more quickly, I suppose, but part of what makes Beam Global such a great company is that we're very cost conscious, and we do not have large teams of people sitting around waiting for these sorts…

[Operator Instructions]

And if I can just say this, could you try and limit yourself to one question or maybe one quick follow-up because I want to make sure that everybody gets a chance.

The first question comes from Christopher Souther from B. Riley.

Maybe just -- and I appreciate all the color you provided here. Maybe just touching a bit more on the margin improvement expectations. It sounded like you said we had about 4,000 of the 12,000 that we've already been able to recognize here last year. Can you walk through the timing of the remaining there? Or correct me if I was wrong there.

No. Yes. Look, I think basically, what's happened is we have started to introduce those savings, which I described in the third quarter call. working through inventories and all the other things that we've had to work on, we have not got all the way through that process yet, but I'm confident that we'll continue to improve into 2024.

And then where are we as far as identifying some of the further reductions from the in-sourcing components from Serbia are all those kind of incremental? And have you identified any specific things you'd kind of call out there that you could parse out as far as what further reductions might look like?

Yes. So far, all the indications are that we're going to have far better economics in Serbia than we do in the U.S. And of course, we'll be reporting consolidated numbers. So margin improvements in Serbia will improve our overall Beam Global margins. And also, Chris, the never ending strong paint the Golden Gate Bridge as far as I'm concerned. As soon as we think we're finished, we start all over again. And I do still believe that there are a lot of other margin improvements that can be made in the product and that we will do that. And we're going to get back to after that, frankly.

Our next question comes from Sameer Joshi from with HC Wainwright.

Just a quick one. The backlog of $22 million, I think you mentioned it doesn't include anything from Beam Europe. Do you have like a -- what kind of visibility do you have in Europe right now in terms of pipeline and backlog?

Yes. As I said, we're still getting our feet under us where that's concerned. The European business before we acquired it, was much less concerned with backlog. And it's not even a term that they used. However, they've had a steady and growing business. which we are enhancing, as I mentioned in my comments, to using our balance sheet to help them smooth out their cash position. Previously, this is a company, by the way, that had no debt. It was accretive acquisition, had brought no debt with it. I didn't even have any credit. I count or anything. They did everything out of cash that they generated from sales. So we've been able to help with that make them more efficient. And I think we're already bearing fruit from that. At the moment, we have none of that backlog is included in the number that I quoted. However, obviously, we are now starting to look more carefully at the contracts that we have in Europe and then we certainly added to the backlog with the purchase order from the U.K. MOD. I'm happy that we're able to report that we've got these backlog numbers without Europe right now because I believe that Europe will be a significant contributor in the future. But I need to get everybody much more confident with those numbers before we start talking about them publicly.

Understood. And just one clarification on the same backlog number. The $7.4 million from U.S. Army and $4.8 million from the DHS, those numbers are not included in this $22 million. Is that correct?

I'll tell you what you're going to have to come back to me on that because we -- I'm not sure how much of any of that we've executed on right now.

Our next question comes from Craig Irwin with Roth MKM.

It's Andrew on for Craig. Congrats on the continued progress. You talked about in the -- on the call a little bit accelerating interest from commercial customers government sales and government -- federal customers has really continued to drive the growth. But can you kind of expand on the opportunities you're seeing with your commercial customers?

Yes, it's really been across the board. I mean, I think we made an announcement that we did some sort of notable things that we've got a large automotive, we're not allowed to now -- by the way, I know it's really frustrating for people, but a lot of times we get purchase orders from large commercial customers who for whatever reason, don't want us to name them. And as I've said before in these calls, I'm not going to upset them and potentially hurt future business with them by doing -- going against the issues. But that was on the battery side of our business. And then on the commercial side of our -- on the EV charging and EV ARC infrastructure side of our business. We've just seen, as I said, quite a significant return to commercial entities ordering these products now since they evaporated almost nothing during COVID. And I think that's a trend that we expect to see continue. Certainly, as a larger percentage of our -- of that $150 million pipeline now coming from commercial customers. And that's a really good thing. And my long-term feeling is, frankly, while it's totally appropriate that there are significant government tailwinds at this period of the evolution of this industry. I do in the end, think that our business will be -- will end up being more commercially driven than government. But we're very happy to take the government business for the time being.

Our next question comes from Tate Sullivan with Maxim Group.

On the U.K. military, the $1 million a quarter, and it takes you less than 5 months to get that. Is there -- do you need a similar contract structure for a country in the European Union is or other paths to go to military orders, please?

I'm sorry, coincidentally, I had the military flying over when you asked that a bunch of Marine Core jetliner. But I think what you asked me was -- can we use the government contract from which the U.K. MOD acquired the EBR in other nations in Europe? Or will we have to get different contracts for different nations? And the answer is, no, we cannot. I'll keep my political thoughts for myself, but especially because Britain exited the European Union through the Brexit process, they're stand-alone where that's concerned. Nevertheless, a fantastic customer I really want to point out, by the way, that us winning that U.K. contract had nothing to do with my national origins, although I am originally from the U.K., the better part of it, north of the border in Scotland but had actually nothing whatsoever to do with that. It was just a U.K. has a need for a product like ours, particularly in the overseas basis. Cypress is the first of those, which were which we're executing on. We will need to go and get other contracts in other nations. And believe me, we're going to do that. And part of the good news about the acquisition that we made in Europe is although they haven't been selling our types of products, they have been selling, as I said, straight to furniture-type infrastructure. to government entities for a long time. So they're very well versed in this type of thing. We're going to go back to all those existing customers and just and add new -- our new products that market to them. But yes, we will have to go through that process, and we will do that because I say it's been very useful to us in the U.S. in terms of our growth year. And I think the European Union and broader Europe. We'll probably be more government-facing where infrastructure is concerned even in the U.S. is -- so it's a challenge for us. But one thing that we've learned is when we win one of these types of contracts, it's always easier to win others because there's a kind of -- nobody wants to be first to be second thing in government, but also much of the work that you have to do in winning one of them is very much copy and pastable into the other applications for other types of things and most of them have very similar qualification requirements. So if we qualify for one, it's unlikely that we wouldn't qualify for others.

So we're at time now, but I'm prepared to go over for a few minutes if there are any other analyst questions. Otherwise, we can -- I know you're all very busy, so we can call it a close.

Okay, operator, that sounds like it. That's it. Thank you, everybody, for your attention. As you can no doubt tell, I remain bullish about Beam Gold in fact more bullish than I've ever been a far bigger and much, much better company than we were just a short period of time ago, and we're only going to get a whole lot better from here out. So thank you for your continued support and interest. And as always, feel free to get directly in touch with the company or with our IR firm core IR, anytime you have any other questions or thought we'd love to hear from you. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.