EVSI Envision Solar International Inc

On June 12, 2023, Beam Global (“Beam”) entered into a binding letter of intent (the “LOI”) with all of the owners (the “Sellers”) of Amiga DOO Kraljevo (“Amiga”), to acquire 100% of the equity of Amiga (the “Transaction”), a business located in Serbia and engaged in the manufacturing and distribution of steel structures with electronic integration, such as streetlights, cell towers, and ski lift towers. Subject to customary closing conditions including the completion and satisfaction by Beam of its due diligence of Amiga, the parties agree that they will enter into a more comprehensive and definitive purchase agreement incorporating the material terms and conditions of the LOI (the “Purchase Agreement”). Pursuant to the term terms of the LOI, Beam will acquire all the equity stock of Amiga from the Sellers in exchange for cash and Beam common stock as set forth below. With respect to the cash portion of the purchase price, Beam will pay to the Sellers, (i) EUR 4,550,000 at closing and (ii) EUR 2,450,000 on or before December 31, 2023 (assuming closing has occurred on or before such date). With respect to the equity portion of the purchase price, Beam will also issue to the Sellers a certain number of shares of Beam common stock (at a price per share equal to the volume weighted average price of Beam’s common stock for the five trading days prior to the closing): (i) at the closing, such number of shares of Beam common stock equal to an aggregate of EUR 1,950,000, and (ii) on or before December 31, 2023, such number of shares of Beam common stock equal to an aggregate of EUR 1,050,000.

In addition, each of the Sellers are eligible to earn additional shares of Beam common stock if such Seller is providing services to Beam and Amiga meets certain revenue milestones for fiscal years 2023 and 2024 (the “Earnout Consideration”). The Earnout Consideration that Sellers are eligible to receive for 2023 is equal to two times the amount of net revenue of Amiga (“Amiga Net Revenue”) that is greater than EUR 10,000,000 for 2023. The Earnout Consideration that Sellers are eligible to receive for 2024 is equal to (i) two times the amount of Amiga Net Revenue for 2024 that exceeds the greater of (i) EUR 13,500,000 or (ii) 135% of the Amiga Net Revenue for 2023. The Earnout Consideration for each period will be calculated based on the volume weighted average price of Beam’s common stock for the thirty trading days prior to the end of the applicable measurement period. In no event under no circumstances will the Sellers receive from Beam or will Beam issue to the Sellers in connection with the Transaction Beam’s common stock in an amount that exceeds 19.99% of the outstanding common stock of Beam immediately prior to the closing.

The Purchase Agreement will include a number of customary covenants and agreements concerning operation of Amiga and actions to be taken by the Sellers between the date of the LOI and the closing date. The closing of the Transaction is subject to customary conditions including, among other things: (i) satisfaction and completion of Beam due diligence of Amiga in Beam’s sole discretion; (ii) absence of a material adverse effect on Amiga’s business and assets; (iii) entry into employment agreements with certain key employees; and (iv) completion of certain ancillary transactions and other closing conditions. For each of Beam and the Sellers, the obligation to close the Transaction is also subject to the accuracy in all material respects of representations and warranties of, and compliance with covenants by, the other party as set forth in the LOI and the Purchase Agreement. Subject to the satisfaction of these conditions, the Company anticipates that the Transaction will close during the third or fourth calendar quarter of 2023, although Beam has a period of 180 days to conduct diligence following the execution of the LOI.

The LOI provides that Beam and the Company may mutually agree to terminate the Transaction before the closing. Beam may terminate the Transaction if Beam is not satisfied with the results of its due diligence on or before 180 days following the execution of the LOI.

A copy of the LOI is attached hereto as Exhibit 10.1 and incorporated in Item 1.01 of this Current Report on Form 8-K by reference. The foregoing description of the LOI does not purport to be complete and is qualified in its entirety by reference to the full text of the LOI. The representations, warranties and covenants contained in the LOI have been made solely for the benefit of the parties to the LOI and: (i) may be intended not as statements of fact but rather as a way of allocating risk among the parties if those statements prove to be inaccurate; and (ii) were made only as of the date of the LOI or such other dates as may be specified in the Purchase Agreement and are subject to more recent developments. Accordingly, any such representations and warranties should not be relied upon as characterizations of the actual state of facts or affairs on the date they were made or at any other time.