0000924168FALSEENERGY FOCUS, INC/DE00009241682024-03-212024-03-21
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 25, 2025
ENERGY FOCUS, INC.
(Exact name of registrant as specified in its charter) | | | | | | | | | | | | | | |
Delaware | | 001-36583 | | 94-3021850 |
(State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification Number) |
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32000 Aurora Road Suite B | Solon, | OH | 44139 |
(Address of principal executive offices) | (Zip Code) |
(440) 715-1300
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.0001 per share | EFOI | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On March 25, 2025, Energy Focus, Inc. issued a press release announcing its financial results for the three and twelve months ended December 31, 2024, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This information, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and will not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit | |
Number | Description |
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99.1 | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: March 25, 2025 | | |
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| ENERGY FOCUS, INC. |
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| By: | /s/ Chiao Chieh (Jay) Huang |
| Name: | Chiao Chieh (Jay) Huang |
| Title: | Chief Executive Officer |
Exhibit 99.1
Energy Focus, Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results
SOLON, Ohio, March 25, 2025 -- Energy Focus, Inc. (NASDAQ: EFOI), a leader in sustainable, energy-efficient lighting and controls systems products for the commercial, military maritime and consumer markets, today announced financial results for its fourth quarter and fiscal year ended December 31, 2024.
Full-Year 2024 and Subsequent Business Highlights
•Net sales of $4.9 million, down 15.0% from 2023, reflecting a decrease in military sales due to a significant reduction in military demand toward the end of the year, driven by the impact of the U.S. election cycle, and a decrease in commercial sales due to the effects of annual market cycles, high inflation, market-adjusted pricing, and our sales strategy which reduced the proportion of commercial sales.
•Gross profit margin of 14.4%, up from gross profit margin of 3.9% in 2023, primarily driven by a decrease in variable costs such as material cost and freight in expense.
•Loss from operations of $1.8 million, compared to a loss from operations in 2023 of $4.0 million, driven by overall reduction of cost of sales, product development, and selling, general, administrative expenses.
•Net loss of $1.6 million, or $(0.32) per basic and diluted share of common stock, compared to a net loss of $4.3 million, or $(1.32) per basic and diluted share of common stock in 2023.
•Cash of $0.6 million as of December 31, 2024, compared to cash of $2.0 million as of December 31, 2023. The changes are primarily due to the payoff of the 2022 Streeterville Note (as defined below) of $1.0 million in cash during the first quarter of 2024.
•On June 21, 2024, Energy Focus, Inc. entered into certain securities purchase agreements with certain accredited investors, pursuant to which the Company agreed to issue and sell in a private placement an aggregate of 534,591 shares of the Company’s common stock, par value $0.0001 per share, for a purchase price per share of $1.59 (the “Second Private Placement”). Aggregate gross proceeds to the Company with respect to the Second Private Placement were approximately $850 thousand, excluding the offering expenses paid by the Company. The Second Private Placement was closed on June 21, 2024.
•On March 28, 2024, Energy Focus, Inc. entered into certain securities purchase agreements with certain accredited investors, pursuant to which the Company agreed to issue and sell in a private placement an aggregate of 283,019 shares of the Company’s common stock, par value $0.0001 per share, for a purchase price per share of $1.59 (the “First Private Placement”). Aggregate gross proceeds to the Company with respect to the First Private Placement were approximately $450 thousand, excluding the offering expenses paid by the Company. The First Private Placement was closed on March 28, 2024.
•On January 18, 2024, the Company and Streeterville Capital, LLC (“Streeterville”) entered into a payoff letter and exchange agreement (the “Agreement”) to pay off a note entered into by and between the Company and Streeterville in 2022 (the “2022 Streeterville Note”) early. The Agreement provided that the Company made payments to reduce the outstanding obligations under the 2022 Streeterville Note of $1.0 million in cash by January 19, 2024 and exchange 94,440 shares of common stock by January 23, 2024 for the remaining $142 thousand. In January 2024, the Company paid off the 2022 Streeterville Note in full. At termination, the
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
Company recognized $187 thousand of other income which was included in other income in the in the Condensed Consolidated Statements of Operations.
“Throughout 2024, the Company remained focused on cost efficiency while ensuring customer satisfaction and timely deliveries. We have strengthened our ability to deliver high-quality products and services while expanding and optimizing our portfolio.” said Chiao-Chieh (Jay) Huang, Chief Executive Officer.
“From our headquarters in Solon, Ohio, we leverage our global network through our office in Taiwan. This structure allows us to integrate resources, serve a diverse clientele, and optimize our supply chain with unmatched efficiency. Our product strategy emphasizes performance enhancement, strategic partnerships, technological advancement, and strategic acquisitions. We are committed to launching innovative products that surpass market expectations. ”
“In review of our plans for 2025, we will continue our steadfast pursuit of being the most dependable supplier and partner for our customers. Our expansion efforts in the Gulf Cooperation Council (GCC) region and Central Asia remain a top priority, working closely with partners and local policymakers to drive business growth. ”
“As part of our growth strategy, we recognize the increasing demand for Energy Storage Systems (ESS), AI data center Uninterruptible Power Supply (UPS) solutions, and microgrid developments. The surge in AI-driven technologies and sustainable energy needs presents immense opportunities for expansion. By investing in ESS, AI data center UPS, and microgrids, we are positioning ourselves as leaders in these rapidly growing sectors. These initiatives will help support critical infrastructure, boost energy efficiency, and provide reliable backup power solutions for enterprises and data centers.”
“We will continue to strive for operational excellence, encompassing all aspects of our business from customer service and manufacturing to sales and product solutions. We are confident in both our progress and planning for the innovation and development of new product, and we believe that 2025 will be a year to which we further establish our name in both military and commercial product channels. ”
Full-Year 2024 Financial Results
Net sales of $4.9 million for 2024 compared with $5.7 million for 2023. The change was primarily driven by a decrease in commercial sales of $0.2 million, or 12.7%, and a decrease in MMM product sales of $0.7 million, or 15.9%. The decrease in net sales reflects the effects of annual market cycles, high inflation, our sales strategy, which reduced the proportion of commercial sales, along with market-adjusted pricing, and the U.S. election cycle.
Gross profit was $0.7 million, or 14.4% of net sales, for 2024, compared with gross loss of $0.2 million, or 3.9% of net sales, for 2023. The year-over-year increase in gross margin primarily resulted from lower payroll-related expenses due to a reduction in headcounts and lower product development and testing cost, which were partially offset by an increase in travel expenses. Adjusted gross margin, as defined under “Non-GAAP Measures” below, was 21.5% for full-year 2024, compared to 4.3% in the prior year, primarily driven by lower variable costs in 2024.
Operating loss was $1.8 million for 2024. This compares with an operating loss of $4.0 million for 2023. Net loss was $1.6 million, or $(0.32) per basic and diluted share of common stock, for 2024. This compares with a net loss of $4.3 million, or $(1.32) per basic and diluted share of common stock, for 2023.
Adjusted EBITDA, as defined under “Non-GAAP Measures” below, was a loss of $1.8 million for 2024, compared with a loss of $3.9 million for 2023. The decreased Adjusted EBITDA loss in 2024, as compared to 2023, was primarily due to improved margins and reduction in headcounts for salaries and related payroll costs.
Net cash used in operating activities was $1.3 million for 2024. The net loss for 2024 was $1.6 million and was adjusted for non-cash items, including depreciation and amortization, stock-based compensation, provisions for inventory, warranty, and accounts receivable reserves and working capital changes. During 2024, we generated $1.0 million through the timing of collection of accounts receivable.
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
Fourth Quarter 2024 Financial Results:
Net sales of $1.3 million for the fourth quarter of 2024 decreased $1.1 million, or 46.6%, compared to the fourth quarter of 2023 net sales of $2.4 million. The change was primarily driven by a decrease in MMM product sales of $1.2 million, or 56.7% due a significant reduction in military demand toward the end of 2024, driven by the impact of the U.S. election cycle. Sequentially, net sales were up 6.4% compared to $1.2 million in the third quarter of 2024, reflecting a slight increase primarily driven by annual market cycles and market-adjusted pricing.
Gross profit was $0.3 million, or 20.7% of net sales, for the fourth quarter of 2024, compared with gross profit of $0.1 million, or 3.1% of net sales, for the fourth quarter of 2023. Sequentially, this compares with a gross profit of $0.2 million, or 15.7% of net sales, in the third quarter of 2024. The year-over-year increase in gross margin was primarily driven by a decrease in fixed costs such as employee benefit and rent expenses for production.
Adjusted gross margin, as defined under “Non-GAAP Measures” below, was 22.1% for the fourth quarter of 2024, compared to 7.0% for the fourth quarter of 2023 and compared sequentially to 24.5% in the third quarter of 2024. The increase in adjusted gross margin from the fourth quarter of 2023 and third quarter of 2024 is mainly due to lower variable costs.
Operating loss was $0.3 million for the fourth quarter of 2024, compared with an operating loss of $0.8 million for the fourth quarter of 2023. Sequentially, this compares to an operating loss of $0.4 million in the third quarter of 2024. The year-over-year decrease in the operating loss was primarily attributable to significant cost cutting measures taken by the Company.
Net loss was $0.3 million, or $(0.06) per basic and diluted share of common stock, for the fourth quarter of 2024, compared with a net loss of $0.8 million, or $(0.20) per basic and diluted share of common stock, in the fourth quarter of 2023. Sequentially, this compares to a net loss of $0.3 million, or $(0.06) per basic and diluted share of common stock, in the third quarter of 2024.
Adjusted EBITDA, as defined under “Non-GAAP Measures” below, was a loss of $0.3 million for the fourth quarter of 2024, compared with a loss of $0.7 million in the fourth quarter of 2023 and a loss of $0.4 million in the third quarter of 2024. The improved adjusted EBITDA loss in the fourth quarter of 2024, as compared to the fourth quarter of 2023, was primarily due to improved margins and lower salaries and related payroll costs.
About Energy Focus
Energy Focus is an industry-leading innovator of sustainable light-emitting diode (“LED”) lighting and lighting control technologies and solutions. As the creator of the first flicker-free LED lamps, Energy Focus develops high quality LED lighting products and controls that provide extensive energy and maintenance savings, as well as aesthetics, safety, health and sustainability benefits over conventional lighting. In 2023, EFOI announced plans to add high efficiency GaN (gallium nitride) power supply products to its product portfolio. Energy Focus is headquartered in Solon, Ohio. For more information, visit our website at www.energyfocus.com.
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
Forward-Looking Statements:
This press release contains information about the Company’s view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. The Company encourages you to review other factors that may affect its future results in the Company’s annual reports and in its other filings with the Securities and Exchange Commission.
###
Investor Contact:
Chiao Chieh (Jay) Huang
Chief Executive Officer
(800) 327-7877
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
Condensed Consolidated Balance Sheets
(Audited)
(in thousands)
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| December 31, |
| 2024 | | 2023 |
ASSETS | | | |
Current assets: | | | |
Cash | $ | 565 | | | $ | 2,030 | |
Trade accounts receivable, less allowances of $15 and $20, respectively | 804 | | | 1,570 | |
Trade accounts receivable - related party | — | | | 202 | |
Inventories, net | 3,263 | | | 4,439 | |
Prepayments to vendors | 356 | | | 792 | |
Prepaid and other current assets | 157 | | | 156 | |
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Total current assets | 5,145 | | | 9,189 | |
Property and equipment, net | 90 | | | 112 | |
Operating lease, right-of-use asset | 377 | | | 899 | |
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Total assets | $ | 5,612 | | | $ | 10,200 | |
LIABILITIES | | | |
Current liabilities: | | | |
Accounts payable | $ | 970 | | | $ | 1,624 | |
Accounts payable - related party | 909 | | | 2,146 | |
Accrued liabilities | 90 | | | 110 | |
Accrued legal and professional fees | 54 | | | 64 | |
Accrued payroll and related benefits | 148 | | | 199 | |
Accrued sales commissions | 15 | | | 62 | |
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Accrued warranty reserve | 118 | | | 150 | |
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Operating lease liabilities | 139 | | | 223 | |
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Promissory notes payable, net of discounts and loan origination fees | — | | | 1,323 | |
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Advanced capital contribution | — | | | 450 | |
Total current liabilities | 2,443 | | | 6,351 | |
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(continued on the following page)
Condensed Consolidated Balance Sheets
(Audited)
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
(in thousands)
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| December 31, |
| 2024 | | 2023 |
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Operating lease liabilities, net of current portion | 254 | | | 798 | |
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Total liabilities | 2,697 | | | 7,149 | |
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STOCKHOLDERS' EQUITY (DEFICIT) | | | |
Preferred stock, par value $0.0001 per share: | | | |
Authorized: 5,000,000 shares (3,300,000 shares designated as Series A Convertible Preferred Stock) at December 31, 2024 and December 31, 2023 | | | |
Issued and outstanding: 876,447 shares at December 31, 2024 and December 31, 2023 | — | | | — | |
Common stock, par value $0.0001 per share: | | | |
Authorized: 50,000,000 shares at December 31, 2024 and December 31, 2023 | | | |
Issued and outstanding: 5,260,741 shares at December 31, 2024 and 4,348,690 shares at December 31, 2023 | 1 | | | — | |
Additional paid-in capital | 157,814 | | | 156,369 | |
Accumulated other comprehensive loss | (3) | | | (3) | |
Accumulated deficit | (154,897) | | | (153,315) | |
Total stockholders' equity | $ | 2,915 | | | $ | 3,051 | |
Total liabilities and stockholders' equity | $ | 5,612 | | | $ | 10,200 | |
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32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
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| Three months ended | | Twelve months ended |
| December 31, | | September 30, | | December 31, | | December 31, |
| 2024 | | 2024 | | 2023 | | 2024 | | 2023 |
Net sales | $ | 1,278 | | | $ | 1,196 | | | $ | 2,393 | | | $ | 4,860 | | | $ | 5,717 | |
Cost of sales | 1,013 | | | 1,008 | | | 2,318 | | | 4,161 | | | 5,494 | |
Gross profit | 265 | | | 188 | | | 75 | | | 699 | | | 223 | |
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Operating expenses: | | | | | | | | | |
Product development | 119 | | | 137 | | | 144 | | | 524 | | | 587 | |
Selling, general, and administrative | 434 | | | 449 | | | 696 | | | 2,017 | | | 3,607 | |
Total operating expenses | 553 | | | 586 | | | 840 | | | 2,541 | | | 4,194 | |
Loss from operations | (288) | | | (398) | | | (765) | | | (1,842) | | | (3,971) | |
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Other expenses (income): | | | | | | | | | |
Interest income | — | | | — | | | (57) | | | — | | | (57) | |
Interest expense | — | | | — | | | 154 | | | 5 | | | 380 | |
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Gain on debt extinguishment | — | | | — | | | — | | | (187) | | | — | |
Gain on partial lease termination | — | | | (63) | | | — | | | (63) | | | — | |
Other income | 3 | | | (26) | | | (14) | | | (27) | | | (30) | |
Other expenses | 1 | | | 7 | | | (2) | | | 10 | | | 26 | |
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Loss from operations before income taxes | (292) | | | (316) | | | (846) | | | (1,580) | | | (4,290) | |
Provision for income taxes | 2 | | | — | | | 3 | | | 2 | | | 3 | |
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Net loss | $ | (294) | | | $ | (316) | | | $ | (849) | | | $ | (1,582) | | | $ | (4,293) | |
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Net loss per common stock basic and diluted: | | | | | | | | | |
Net loss | $ | (0.06) | | | $ | (0.06) | | | $ | (0.20) | | | $ | (0.32) | | | $ | (1.32) | |
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Weighted average shares of common stock outstanding: | | | | | | | | | |
Basic and diluted | 4,947 | | | 5,261 | | | 4,349 | | | 4,947 | | | 3,241 | |
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32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
Condensed Consolidated Statements of Cash Flows
(In thousands)
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| Three months ended | | Twelve months ended | | |
| December 31, | | September 30, | | December 31, | | December 31, | | |
| 2024 | | 2024 | | 2023 | | 2024 | | 2023 | | |
Cash flows from operating activities: | | | | | | | | | | | |
Net loss | $ | (294) | | | $ | (316) | | | $ | (849) | | | $ | (1,582) | | | $ | (4,293) | | | |
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Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | |
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Other income | — | | | — | | | — | | | — | | | (40) | | | |
Gain on partial lease termination | — | | | (63) | | | — | | | (63) | | | — | | | |
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Gain on debt extinguishment | — | | | — | | | — | | | (187) | | | — | | | |
Depreciation | 9 | | | 9 | | | 9 | | | 37 | | | 33 | | | |
Stock-based compensation | 2 | | | 1 | | | 8 | | | 4 | | | 44 | | | |
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Provision for credit losses and sales returns | 1 | | | 6 | | | (44) | | | (69) | | | 6 | | | |
Provision for slow-moving and obsolete inventories | 17 | | | 105 | | | 93 | | | 347 | | | 25 | | | |
Provision for warranties | — | | | 1 | | | 4 | | | (32) | | | (33) | | | |
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Amortization of loan discounts and origination fees | — | | | — | | | 57 | | | 5 | | | 225 | | | |
Changes in operating assets and liabilities: | | | | | | | | | | | |
Accounts receivable | (60) | | | (100) | | | (682) | | | 1,037 | | | (1,131) | | | |
Accounts receivable - related party | — | | | — | | | (202) | | | — | | | (202) | | | |
Inventories | 441 | | | (35) | | | 369 | | | 829 | | | 1,012 | | | |
Prepayments to vendors | 54 | | | 14 | | | (60) | | | 83 | | | (200) | | | |
Prepaid and other assets | 58 | | | 4 | | | 33 | | | 3 | | | 521 | | | |
Accounts payable | (478) | | | 98 | | | (706) | | | (301) | | | (580) | | | |
Accounts payable - related party | 11 | | | 163 | | | 1,874 | | | (1,237) | | | 2,146 | | | |
Accrued and other liabilities | 2 | | | (104) | | | (48) | | | (128) | | | (47) | | | |
Right of use assets and lease liabilities | (17) | | | (50) | | | 75 | | | (43) | | | 75 | | | |
Total adjustments | 40 | | | 49 | | | 780 | | | 285 | | | 1,854 | | | |
Net cash used in operating activities | (254) | | | (267) | | | (69) | | | (1,297) | | | (2,439) | | | |
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Cash flows from investing activities: | | | | | | | | | | | |
Acquisitions of property and equipment | — | | | (19) | | | (42) | | | (19) | | | (69) | | | |
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Net cash (used in) provided by investing activities | — | | | (19) | | | (42) | | | (19) | | | (69) | | | |
(continued on the next page) | | | | | | | | | | | |
Condensed Consolidated Statements of Cash Flows
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
(In thousands)
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Cash flows from financing activities: | | | | | | | | | | | |
Issuance of common stock and warrants | — | | | — | | | — | | | 851 | | | 6,079 | | | |
Costs related to reverse stock-split | — | | | — | | | — | | | — | | | (16) | | | |
Payments on the 2022 Streeterville Note | — | | | — | | | — | | | (1,000) | | | (625) | | | |
Net payments on credit line borrowings - Credit Facilities | — | | | — | | | — | | | — | | | (1,402) | | | |
Advanced capital contribution | — | | | — | | | 450 | | | — | | | 450 | | | |
Net cash provided by financing activities | — | | | — | | | 450 | | | (149) | | | 4,486 | | | |
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Net (decrease) increase in cash | (254) | | | (286) | | | 339 | | | (1,465) | | | 1,978 | | | |
Cash, beginning of period | 819 | | | 1,105 | | | 1,691 | | | 2,030 | | | 52 | | | |
Cash, end of period | $ | 565 | | | $ | 819 | | | $ | 2,030 | | | $ | 565 | | | $ | 2,030 | | | |
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Supplemental information: | | | | | | | | | | | |
Cash paid in year for interest | $ | — | | | $ | — | | | $ | 303 | | | $ | 5 | | | $ | 380 | | | |
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Non-cash investing and financing activities: | | | | | | | | | | | |
Debt-to-equity exchange transactions | $ | — | | | $ | — | | | $ | 304 | | | $ | 591 | | | $ | 1,716 | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Sales by Products
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | Twelve months ended |
| December 31, | | September 30, | | December 31, | | December 31, |
| 2024 | | 2024 | | 2023 | | 2024 | | 2023 |
Commercial products | $ | 386 | | | $ | 350 | | | $ | 332 | | | $ | 1,390 | | | $ | 1,593 | |
Military maritime products | 892 | | | 846 | | | 2,061 | | | 3,470 | | | 4,124 | |
Total net sales | $ | 1,278 | | | $ | 1,196 | | | $ | 2,393 | | | $ | 4,860 | | | $ | 5,717 | |
Non-GAAP Measures
In addition to the results in this release that are presented in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), we provide certain non-GAAP measures, which present operating results on an adjusted basis. These non-GAAP measures are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and, include:
•adjusted EBITDA, which we define as net income (loss) before giving effect to financing charges, income taxes, non-cash depreciation, stock non-cash compensation, accrued incentive compensation, non-routine charges to other income or expense; and
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
•adjusted gross margins, which we define as our gross profit margins during the period without the impact from excess and obsolete, in-transit and net realizable value inventory reserve movements that do not reflect current period inventory decisions.
We believe that our use of these non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies within the industry by isolating the effects of items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies, and to assess liquidity, cash flow performance of the operations, and the product margins of our business relative to our U.S. GAAP results and relative to other companies in the industry by isolating the effects of certain items that do not have a current period impact. However, our presentation of these non-GAAP measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. Further, there are limitations on the use of these non-GAAP measures to compare our results to other companies within the industry because they are not necessarily standardized or comparable to similarly titled measures used by other companies. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for how our management team and Board of Directors evaluate our operating performance.
Adjusted EBITDA and adjusted gross margins do not represent cash generated from operating activities in accordance with U.S. GAAP, are not necessarily indicative of cash available to fund cash needs and are not intended to and should not be considered as alternatives to cash flow, net income and gross profit margins, respectively, computed in accordance with U.S. GAAP as measures of liquidity or operating performance. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP are provided below for total adjusted EBITDA and adjusted gross margins, respectively.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | Twelve months ended |
(in thousands) | December 31, | | September 30, | | December 31, | | December 31, |
| 2024 | | 2024 | | 2023 | | 2024 | | 2023 |
Net loss | $ | (294) | | | $ | (316) | | | $ | (849) | | | $ | (1,582) | | | $ | (4,293) | |
| | | | | | | | | |
| | | | | | | | | |
Interest income | — | | | — | | | (57) | | | — | | | (57) | |
Interest expense | — | | | — | | | 154 | | | 5 | | | 380 | |
| | | | | | | | | |
Gain on debt extinguishment | — | | | — | | | — | | | (187) | | | — | |
| | | | | | | | | |
Gain on partial lease termination | — | | | (63) | | | — | | | (63) | | | — | |
Other income | 3 | | | (26) | | | (14) | | | (27) | | | (30) | |
Provision for income taxes | 2 | | | — | | | 3 | | | 2 | | | 3 | |
Depreciation | 9 | | | 9 | | | 9 | | | 37 | | | 33 | |
Stock-based compensation | 2 | | | 1 | | | 8 | | | 4 | | | 44 | |
| | | | | | | | | |
Other incentive compensation | — | | | — | | | 9 | | | — | | | (18) | |
Adjusted EBITDA | $ | (278) | | $ | — | | $ | (395) | | | $ | (737) | | | $ | (1,811) | | | $ | (3,938) | |
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | Twelve months ended |
(in thousands) | December 31, 2024 | | September 30, 2024 | | December 31, 2023 | | December 31, 2024 | | December 31, 2023 |
| ($) | | (%) | | ($) | | (%) | | ($) | | (%) | | ($) | | (%) | | ($) | | (%) |
Net sales | $ | 1,278 | | | | | $ | 1,196 | | | | | $ | 2,393 | | | | | $ | 4,860 | | | | | $ | 5,717 | | | |
Reported gross profit | 265 | | | 20.7% | | 188 | | | 15.7% | | 75 | | | 3.1% | | 699 | | | 14.4% | | 223 | | | 3.9% |
Excess and obsolete, in-transit and net realizable value inventory reserve changes, net of scrap write-off for inventory reduction | 17 | | | 1.3% | | 105 | | | 8.8% | | 93 | | | 3.9% | | 347 | | | 7.1% | | 25 | | | 0.4% |
Adjusted gross margin | $ | 282 | | | 22.1% | | $ | 293 | | | 24.5% | | $ | 168 | | | 7.0% | | $ | 1,046 | | | 21.5% | | $ | 248 | | | 4.3% |
32000 Aurora Road, Solon, OH 44139 • www.energyfocus.com • 800.327.7877
v3.25.1
Cover
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Mar. 21, 2024 |
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