Business Description

commercial and maritime lighting fixtures. The LED lighting market has faced intense competition and price erosion in recent years. To stay competitive, we’ve reduced costs, streamlined our supply chain, and focused on product innovation. We’ve also restructured our sales strategies, focusing more on direct sales, strategic partnerships, and customer feedback to drive product development. Despite industry challenges, we continue to innovate, offering differentiated, high-value products that meet the most demanding market needs. In 2025, we enhanced the RedCap ® product line, further improving user experience and functionality. 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 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 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 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. 4 Table of Contents • 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. We acknowledged the increasing competition in the MMM sales space, both in terms of pricing pressure and the growing number of competitors. • The Company has aggressively re-evaluated operating expenses throughout the year to manage fixed costs.…