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. Riley’s commitment to purchase shares of the Company’s 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 Company’s stockholders approved the Beam Global 2021 Equity Incentive Plan (the “2021 Plan”) under which 2,000,000 shares of the Company’s 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 outstanding shares of the Company’s common stock as of the immediately preceding December 31, or a lesser number as may be determined by our board of directors or compensation committee. As of December 31, 2025, 3.9 million shares remain available to grant under the 2021 Plan.

Stock Options

Stock options are granted to new and existing employees. New employee option grants generally have a term of ten years and vest ratably over four years. Existing employee option grants generally have a term of ten years and vest immediately upon grant.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected option life and expected volatility in the market value of the underlying common stock based on our historical volatility. The Company uses the simplified method to estimate the expected term. The expected term of stock options granted to employees is equal to the contractual term of the option award. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility because the Company’s stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate.

We used the assumptions in the table below and we assumed there would not be dividends granted for the options granted in fiscal 2025 and 2024:

Option activity for the years ended December 31, 2025 and 2024 is as follows:

The Company’s stock option compensation expense was $0.4 million and $0.8 million for the years ended December 31, 2025 and 2024, respectively, and there was $3.9 million of total unrecognized compensation costs related to outstanding stock options at December 31, 2025 which will be recognized over 5.3 years. There were no options exercised in the year ended December 31, 2025, and the total intrinsic value of options exercised was immaterial for the year ended December 31, 2024. Number of stock options vested and unvested as of December 31, 2025 were 554,061 and 183,389, respectively. During the years ended December 31, 2025 and 2024, the weighted average fair value of options granted was $5.90 and $4.02 per share, respectively. Stock-based compensation expense is generally included in selling, general and administrative expenses in the consolidated statement of operations.

Restricted Stock Units and Common Stock

During the year ended December 31, 2025, the Company granted 222,656 restricted stock units (RSUs), 187,031 of which contain performance conditions (PSUs), as well as 870,000 shares of the Company's common stock to its Chief Executive Officer. All units and shares vested upon issuance.

A summary of activity of the RSUs for the year ended December 31, 2025 is as follows:

A summary of activity of the PSUs for the year ended December 31, 2025 is as follows:

Stock compensation expense related to restricted stock units was $0.5 million during the year ended December 31, 2025, with no further unrecognized stock compensation expense to be recognized as of December 31, 2025. Stock compensation expense related to common stock granted was $1.3 million during the year ended December 31, 2025.

Restricted Stock Awards

The Company issues restricted stock to the members of its board of directors as compensation for such members’ services. Such grants generally vest ratably over four quarters. Through 2022, the Company also issued restricted stock to its CEO, for which generally 50% of the shares granted vest ratably over four quarters and the remaining 50% vest ratably over twelve quarters. The common stock related to these awards are issued to an escrow account on the date of grant and released to the grantee upon vest. The fair value is determined based on the closing stock price of the Company’s common stock on the date granted and the related expense is recognized ratably over the vesting period.

A summary of activity of the restricted stock awards for the years ended December 31, 2025 and 2024 is as follows:

Stock compensation expense related to restricted stock awards was $0.4 million for the year ended December 31, 2025 and $0.5 million for the year ended December 31, 2024, respectively. Fair values of restricted stock vested during each of the years ended December 31, 2025 and 2024 were 0.4 million.

As of December 31, 2025, there were no unvested shares of common stock.

Warrants

As of  December 31, 2025, the Company had outstanding warrants to purchase up to 200,000 shares of the Company’s common stock at a price per share equal to $17.00 to a consultant for investor relations services to be provided over a five-year period. The warrants are immediately exercisable but are subject to repurchase by the Company until the required service is provided. The fair value of such warrants was $8.05 per share or $1.6 million on the date of grant using the Black-Scholes option-pricing model. This model incorporated certain assumptions for inputs including a risk-free market interest rate of 3.86%, expected dividend yield of the underlying common stock of 0%, expected life of 2.5 years and expected volatility in the market value of the underlying common stock based on our historical volatility of 99.6%. The fair value of the warrants was recorded to prepaid expenses and other current assets to be recognized over the service period. During the year ended December 31, 2025, $0.3 million was recorded as expense and at December 31, 2025, $0.7 million of cost has not been recognized and will be recognized over the next 2.25 years.

A summary of activity of warrants outstanding for the years ended December 31, 2025 and 2024 is as follows:

Outstanding warrants as of December 31, 2025 have a weighted average remaining contractual life of 2.25 years and will expire in March 2028. The outstanding shares of the warrants at December 31, 2025 have no intrinsic value.

During the year ended December 31, 2025, no warrants were exercised, and in the year ended December 31, 2024, 128,411 warrants to purchase shares of the Company’s registered common stock were exercised generating $0.8 million.