What changed in this filing

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Item 1. Business

2026-03-24 compared with 2025-03-25 · 48 added, 36 removed, 156 unchanged (35% of the section changed)

1 unchanged sentence

We provide high-quality LED lighting solutions for both commercial and military maritime markets (MMM), helping our customers improve energy efficiency, productivity, and wellness through advanced LED retrofit products.

Our core products include energy-efficient tubular LED (TLED) lighting that replaces fluorescent and high-intensity discharge (HID) lamps in institutional and commercial buildings.

We also offer innovative solutions like our patented RedCap ® TLED with an integrated emergency backup battery.

Our core products include robust lighting fixtures and lamps for navy and military applications, Energy Storage Systems (“ESS”), Uninterruptible Power Supply (“UPS”), and tubular LED (“TLED”) lighting products, including battery backup units as well as general commercial and maritime lighting fixtures.

The LED lighting market has faced intense competition and price erosion in recent years.

3 unchanged sentences

In 2025, we enhanced the RedCap ® product line, further improving user experience and functionality.

It is our belief that the continued dramatic rightsizing efforts undertaken in 2023 and 2024, along with reorganization of the sales team and ongoing development of innovative, high-value products and an expanded distribution network, will over time result in improved sales and bottom-line performance for the Company.

Additionally, we have engaged in preliminary discussions and business development activities with certain contractors that serve U.S.

Department of Defense (“DoD”) customers.

These efforts are intended to explore potential opportunities and do not constitute awarded contracts or firm commitments.

In 2025, we recommitted to building upon the transformation activities that sought to stabilize and regrow our business.

These efforts include the following key developments that occurred during 2025:

• On June 12, 2024, the Board approved the departure of Jason Tien-Chia Tsai and appointed Wen Cheng Chen as a new member.

All current Board members other than our CEO Mr.

Huang remain independent directors under the corporate governance standards of Nasdaq.

• 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 Company recognized $187 thousand of other income which was included in other income in the Condensed Consolidated Statements of Operations.

• On June 30, 2025, the Board approved the departure of Gina (Mei-Yun) Huang, and on August 8, 2025, appointed Sophia Shee as a new member of the Board.

The resignations did not involve any disagreement with the Company.

All current Board members, other than our Chief Executive Officer, Mr.

Chiao Chieh (Jay) Huang, are independent directors under the corporate governance standards of Nasdaq.

• On March 27, 2025, 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.

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 103,627 shares of the Company’s common stock, par value $0.0001 per share, for a purchase price per share of $1.93 (the “March 2025 Private Placement”).

Aggregate gross proceeds to the Company with respect to the March 2025 Private Placement were approximately $200 thousand, excluding the offering expenses paid by the Company.

The March 2025 Placement closed on March 31, 2025.

• On June 19, 2025, 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.

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 110,497 shares of the Company’s common stock, par value $0.0001 per share, for a purchase price per share of $1.81 (the “June 2025 Private Placement”).

Aggregate gross proceeds to the Company with respect to the June 2025 Private Placement were approximately $200 thousand, excluding the offering expenses paid by the Company.

The June 2025 Private Placement closed on June 23, 2025.

• On August 15, 2025, 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 264,550 shares of the Company’s common stock, par value $0.0001 per share, for a purchase price per share of $1.89 (the “August 2025 Private Placement”).

Aggregate gross proceeds to the Company with respect to the August 2025 Private Placement were approximately $500 thousand, excluding the offering expenses paid by the Company.

The August 2025 Private Placement closed on August 19, 2025.

• On November 26, 2025, 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 524,018 shares of the Company’s common stock, par value $0.0001 per share, for a purchase price per share of $2.29 (the “November 2025 Private Placement”).

Aggregate gross proceeds to the Company with respect to the November 2025 Private Placement were approximately $1.2 million, excluding the offering expenses paid by the Company.

The November 2025 Private Placement closed on December 2, 2025.

• In 2025, we carefully researched and analyzed our historical sales data and the current market landscape, focusing on our pricing position and overall sales strategy.

3 unchanged sentences

In 2026, we plan to pursue expansion into new markets and industries to diversify our portfolio and drive growth:

• ESS (Energy Storage Systems) Business Opportunity:

• ESS Business Opportunity:

We intend to explore energy storage solutions that could complement our existing product lines and support sustainability efforts.

• AI Data Center UPS Development:

We aim to enter the AI data center market through development of advanced Uninterruptible Power Supply (UPS) systems tailored to meet the high-demand energy needs of AI-driven data centers.

We aim to enter the AI data center market through development of advanced UPS systems tailored to meet the high-demand energy needs of AI-driven data centers.

• Global Market Expansion:

15 unchanged sentences

Our focus is on leading the market in human-centric lighting and high-tech energy solutions by offering top-quality, energy-efficient LED products, including "flicker-free" long-life lamps, retrofit kits, and advanced power technologies.

In addition to LED lighting, we’ve expanded into energy-saving high-technology GaN (Gallium Nitride) power supplies, Energy Storage Systems (ESS), and Uninterruptible Power Supply (UPS) products tailored for AI data centers, positioning us at the forefront of sustainable technology for modern industries.

In addition to LED lighting, we’ve expanded into energy-saving high-technology Gallium Nitride (“GaN”) power supplies, ESS, and UPS systems products tailored for AI data centers, positioning us at the forefront of sustainable technology for modern industries.

The demand for energy-efficient solutions like LEDs and advanced power systems is growing rapidly, driven by cost savings, environmental goals, and health benefits.

8 unchanged sentences

• Industrial LED dock lights;

• UPS systems products designed for AI data centers

MMM LED lighting products to serve the U.S.

5 unchanged sentences

• Energy-saving GaN power supplies for efficient power delivery;

• Energy Storage Systems (ESS) and Uninterruptible Power Supply (UPS) products designed for AI data centers

• ESS products designed for AI data centers

Our products outperform traditional lighting and power solutions, offering financial savings, reduced carbon emissions, and improved occupant health.

7 unchanged sentences

Sales and Marketing

Our company is dedicated to advancing innovative technologies and high-performance solutions across multiple sectors, including LED lighting, Energy Storage Systems (ESS), Gallium Nitride (GaN) Power Supplies, and AI Data Center Uninterruptible Power Supplies (UPS).

Our company is dedicated to advancing innovative technologies and high-performance solutions across multiple sectors, including LED lighting, ESS, GaN power supplies, and AI Data Center UPS.

We aim to strengthen our market presence in these areas while expanding our business reach in the Asia region.

16 unchanged sentences

Furthermore, our high bay and low bay lighting solutions cater to large-scale facilities such as warehouses and retail stores, offering energy and maintenance cost savings.

• Energy Storage Systems (ESS)

We are expanding into the ESS market, offering reliable energy storage solutions for both commercial and industrial applications.

17 unchanged sentences

Concentration of Sales

In 2024, two customers accounted for 33% of net sales, with sales to our primary distributor for the U.S.

While total MMM sales declined 43% year-over-year, sales to our primary Navy distributor remained approximately flat at $0.8 million, increasing from 16% to 21% as a percentage of total sales as the denominator of total sales decreased.

This increased concentration heightens our exposure to the loss of any major customer.

We are focused on broadening our customer base and pursuing additional customer opportunities in international markets to mitigate customer concentration risk.

In 2025, three customers accounted for 48% of net sales, with sales to a distributor for the U.S.

Navy accounting for approximately 21% and two commercial customers accounting for approximately 27%.

In 2024, two customers accounted for 33% of net sales, with sales to a distributor for the U.S.

Navy accounting for approximately 16% and a shipbuilder for the U.S.

Navy accounting for approximately 17%.

In 2023, two customers accounted for 48% of net sales, with sales to our primary distributor for the U.S.

Navy accounting for approximately 35% of net sales, and sales to a shipbuilder for the U.S.

Navy accounting for approximately 13% of net sales.

Our LED lighting products compete against a variety of lighting products, including conventional light sources such as compact fluorescent lamps and HID lamps, as well as other TLEDs and integrated LED luminaire products.

15 unchanged sentences

Our approach includes evaluating opportunities for additional outsourcing or increased insourcing when it enhances cost efficiency, quality, or performance.

Our suppliers are primarily based in Asia.

Our suppliers are primarily based in the United States and Asia.

We continue to reduce transportation costs while actively managing shorter lead times for component procurement.

One offshore supplier (a related party, See Note 12 “Related Party Transactions”) accounted for approximately 36% of our total expenditures for the twelve months ended December 31, 2024.

At December 31, 2024, two offshore suppliers accounted for approximately 36% and 54% (a related party, See Note 12, “Related Party Transactions” of this Annual Report on Form 10-K, for additional information) of our trade accounts payable balance, respectively.

No offshore supplier accounted for more than 10% of our total expenditures for the twelve months ended December 31, 2023.

At December 31, 2023, two offshore suppliers accounted for approximately 16% and 57% (a related party, See Note 12, “Related Party Transactions” of this Annual Report on Form 10-K, for additional information) of our trade accounts payable balance, respectively.

Two suppliers (related parties, See Note 14 “Related Party Transactions” of this Annual Report on Form 10-K, for additional information) accounted for approximately 28% of our total expenditures for the twelve months ended December 31, 2025.

At December 31, 2025, two suppliers accounted for approximately 11% and 71% (a related party, See Note 14, “Related Party Transactions” of this Annual Report on Form 10-K, for additional information) of our trade accounts payable balance.

One supplier (a related party, See Note 14 “Related Party Transactions” of this Annual Report on Form 10-K, for additional information) accounted for approximately 36% of our total expenditures for the twelve months ended December 31, 2024.

At December 31, 2024, two suppliers accounted for approximately 32% and 48% (a related party, See Note 14, “Related Party Transactions” of this Annual Report on Form 10-K, for additional information) of our trade accounts payable balance, respectively.

Product Development

2 unchanged sentences

We believe that our customer-focused approach to product development ensures that our R&D investments yield impactful and innovative products, driving faster market adoption and strengthening our competitive advantage.

Additionally, we collaborate with certain prime contractors serving the U.S.

Department of Defense on product development initiatives that align with anticipated DoD program requirements for 2026 and 2027.

These efforts are intended to support qualification, testing, and integration of our products into customer programs.

Intellectual Property

7 unchanged sentences

Competitors may develop similar products or access proprietary information despite these protections.

The laws of some foreign countries in which we manufacture, sell or may sell our products do not protect proprietary rights to products to the same extent as the laws of the United States.

The laws of some foreign countries in which we manufacture, sell or may sell

our products do not protect proprietary rights to products to the same extent as the laws of the United States.

Please refer to Note 9, “Commitments and Contingencies,” of this Annual Report on Form 10-K, for additional information.

5 unchanged sentences

In addition, although not legally required to do so, we strive to obtain certification for substantially all our products.

In the United States, we seek certification on substantially all of our products from UL ® , Intertek Testing Services (“ETL ® ”), or DesignLights Consortium (“DLC™”).

In the United States, we seek certification on substantially all of our products from UL Solutions (UL®), Intertek Testing Services (“ETL®”), or DesignLights Consortium (“DLC™”).

Where appropriate in jurisdictions outside the United States, we seek to obtain other similar national or regional certifications for our products.

2 unchanged sentences

As of December 31, 2025, we had 8 full-time employees and 4 part-time employees, with 7 based in the United States and 5 in Taiwan.

We had two temporary contractors as of December 31, 2024.

We had 5 temporary contractors as of December 31, 2025.

None of our employees or contractors are subject to collective bargaining agreements and we consider our relationship with our employees to be good.

5 unchanged sentences

We currently operate in a single business segment that includes the marketing and sale of commercial and MMM lighting products and controls.

Please refer to Note 11, “Product and Geographic Information,” included in Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K, for additional information.

Please refer to Note 12, “Product and Geographic Information,” and Note 13, “Segment Information,” included in Item 8, “Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K, for additional information.

Available Information

4 unchanged sentences

The information on our website is not a part of, nor is it incorporated by reference into this Annual Report on Form 10-K.

Through our website, we make available, free of charge, our annual proxy statement, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish them to, the Securities and Exchange Commission, or the SEC.

We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports with the Securities and Exchange Commission (“SEC”).

The SEC maintains a website that contains these reports at www.sec.gov .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business