BEEM

• Financial Performance & Balance Sheet Strength: The company closed the quarter with no debt, no going-concern qualification, and an entirely unused $100 million line of credit, providing dry powder for future large orders. Net loss narrowed both GAAP and non-GAAP, driven by disciplined cost structure and operating leverage as revenue reaccelerates. The company completed relocation of its U.S. manufacturing operations from San Diego, California to Yuma, Arizona, with expected total rent savings of approximately $2.7 million over the 5-year lease term, plus additional savings in labor, compliance, taxes and other operating costs. All key manufacturing personnel chose to relocate, maintaining operational continuity.

• Geographic Expansion: The company has established a global footprint with operations in Western U.S., Midwest U.S., Europe, and the Middle East. EV sales continue to grow strongly across Europe (up 35% YoY), with the company seeing strong demand for its off-grid energy solutions, and is currently participating in multiple public tenders with no direct competitors for its unique product offerings. Middle East operations via a joint venture with The Platinum Group are progressing despite regional geopolitical uncertainty, with the company demonstrating products at the Make It in the Emirates event in Abu Dhabi and selling one demonstration unit on site, and the region has a stated $1 trillion plan for sustainable mobility infrastructure over the next decade.

• Product & Technology Diversification: The company has transitioned from a single-product, single-country firm to a vertically integrated platform serving energy, mobility, and intelligence end-markets, with new patents issued in the quarter (one in Europe for battery solutions, one in the U.S. for energy generation technology) expanding its intellectual property moat. It has developed breakthrough high-power burst battery technology for AI data centers, adapted from defense applications, that was accepted for presentation at IEcon 26 from over 1,800 submissions. The company booked over $500 thousand in drone and autonomous robotics battery orders in a single week during the quarter, offering bespoke form-factor, high energy density, thermally safe batteries that do not require drone manufacturers to redesign their airframes around off-the-shelf battery shapes, plus the patented BeamFlight off-grid autonomous drone charging platform that extends drone range and supports operator operational security for defense users. It also supplies batteries for AI robotics, wildfire detection systems, and defense applications including weapon systems. For the EV and autonomous vehicle market, the company offers off-grid, no-construction energy generation and storage solutions that support existing EV charging, plus a fully patented off-grid autonomous wireless charging solution for robotaxis and autonomous vehicle fleets that eliminates the need for costly central depots, super-fast charging, and utility energy costs.

• New Business Model Innovation: The company has launched a sponsorship-funded recurring revenue model for EV ARC deployments, starting at Belgrade International Airport where sponsor Globus Insurance receives high-impact brand exposure from 7 million annual transiting passengers, while end users get free charging. The model is profitable, high-margin, recurring, and the company is expanding deployments across Europe, with management expecting it to scale significantly over time.

• Smart Cities Infrastructure: The company deployed its smart cities solutions across more than 30 cities in 5 countries during the quarter, expanding its global footprint and creating cross-selling opportunities for its other product lines.

• Management expects gross margins to improve as sales volumes increase, reducing the per-unit impact of fixed overhead, and as cost reduction initiatives from the Yuma manufacturing move take full effect. Unit-level gross margins on the company's specialized new products already reach up to 40%, and management's long-term target for overall company gross margin is 50%.
• Management reaffirmed that the company is positioned for scalable, stable growth as market conditions evolve, and is pursuing large, transformative potential orders that could materially alter the company's financial trajectory if secured within the next 12 months.
• Geographic growth is expected to accelerate in Europe, where management sees strong unmet demand for the company's unique off-grid energy solutions that do not require utility grid expansion or disruptive construction.
• Following the end of current regional hostilities, management expects aggressive growth to resume in the Middle East, where the company is well-positioned to capture a share of the region's planned $1 trillion in sustainable mobility infrastructure investment.
• Existing global manufacturing facilities have sufficient excess capacity to support revenue growth up to $1 billion with minimal additional capital expenditure.

The company does not disclose formal segment revenue breakdowns for product lines, but provides the following geographic and directional performance: Geographic segments: Europe now contributes equal revenue to the United States, with strong ongoing growth. Overall Q2 2026 total company revenue was $8.6 million, up 21% year-over-year (YoY) and 174% quarter-over-quarter (QoQ). Reported gross profit was $1.5 million (17.8% gross margin), compared to $1.4 million (20.3% margin) in Q2 2025. Adjusted non-GAAP gross margin (excluding non-cash depreciation and amortization) was 26.2% YoY vs 29.6% in the prior year. Operating expenses were $4.5 million, down from $5.9 million YoY (which included a $1.4 million stock grant); excluding that grant, operating expenses were flat YoY. Net loss was $3.1 million ($0.14 per share) vs $4.3 million ($0.28 per share) YoY. Non-GAAP net loss (excluding $1.1 million in non-cash charges) was $2 million vs $1.8 million YoY. Ending backlog was $5.4 million, down from converted backlog shipped during the quarter.

• Forward-looking statements are inherently uncertain, and actual results may differ materially from current expectations due to identified and unforeseen risks, as detailed in the company's most recent Form 10-K and other SEC filings.
• Ongoing geopolitical conflict in the Middle East has created regional uncertainty, slowed business activity and investment, and delayed the company's growth plans for the region.
• U.S. public markets currently misprice the company alongside low-margin EV charging stocks, despite the company's distinct product and market positioning, leading to a current undervaluation.
• Large potential orders have long, uncertain sales cycles, and there is no guarantee that the company will secure the large transformative deals it is currently pursuing.
• While the company's gross margin is trending positively, it remains below management's long-term target, dependent on increasing sales volume to absorb fixed overhead.

Q: What are the highest growth areas in the current order book, do strong Q2 trends continue into Q3, and what are margin expectations for new opportunities? / A: Order growth is positive across all segments, but battery and energy storage (especially defense, drone and specialty applications) is growing fastest from a lower base. International expansion into Europe is also delivering strong order growth, confirming the earlier strategic investment was correct. Current gross margins are 26-27% non-GAAP, with unit economics already reaching 40% on specialized products; volume increases will absorb fixed overhead and move overall margins toward the 50% long-term target. Europe has strong EV growth (35% YoY) and the company faces no direct competition for its unique off-grid energy products, so margins remain healthy there.

Q: Are you pursuing any large, transformative orders that could materially change your financial performance in the next year? / A: Management confirms it is actively pursuing multiple large opportunities that would significantly shift the company's trajectory. While large targets have long sales cycles and success is not guaranteed, the company has a history of delivering on stated strategic goals, has the right products for high-growth markets, and the management team has high confidence that at least one of these large opportunities will close.

Q: What are your competitive advantages for custom batteries in drone and robotic markets, and what is the scope of your wireless charging patent portfolio? / A: The company's core advantages are its ability to produce bespoke, safe, high energy density custom form-factor batteries that don't require customers to redesign their products, plus its unique off-grid autonomous charging capability that works anywhere from battlefields to urban rooftops. It also has an existing customer base of military, law enforcement and government entities that are actively adopting drones and robotics, putting the company in a strong position. For wireless charging, the core patented innovation is the ability to rapidly deploy wireless charging at scale without construction or grid upgrades, enabling dispersed charging for autonomous vehicle fleets that eliminates the need for costly central depots, with strong IP protection for this unique model.

Q: What is the current size of the drone/robotics battery business, how large can the European sponsorship EV ARC model get, and what is the outlook for Middle East business? / A: The company cannot break out product segment revenue per accounting rules, but confirms the drone/robotics battery business is growing as expected with high-quality customers. The data center battery opportunity is large and uniquely suited to the company's existing defense-derived technology, though timing of commercial traction is still uncertain. The sponsorship model is already active and scaling, is highly profitable and recurring, competes directly with traditional outdoor advertising, and could grow very large as more brands recognize its higher impact than billboards. In the Middle East, high-quality government and corporate conversations are progressing, but uncertainty from ongoing conflict has slowed activity; when hostilities end, the company is well-positioned via its joint venture partner to capture a share of the region's large planned infrastructure investment.