##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-24230
 ENERGY FOCUS, INC.
  DELAWARE
(State of incorporation)
    
    94-3021850
(I.R.S. Employer Identification No.)
 32000 Aurora Road
Solon, Ohio 44139
 440.715.1300
   Title of Each Class  Common Stock, Par Value $0.0001
Series A Participating Preferred Stock Purchase Rights
 o þ
 o þ
 þ o
 o þ
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
   Documents Incorporated by Reference




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##### 



TABLE OF CONTENTS
 PagePART IItem 1.
    
    Business
    
    2Item 1A.
    
    Risk Factors
    
    9Item 1B.
    
    Unresolved Staff Comments
    
    16Item 2.
    
    Properties
    
    16Item 3.
    
    Legal Proceedings
    
    17Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    17PART IIItem 5.
    
    Market for the Registrants Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
    
    19Item 6.
    
    Selected Financial Data
    
    21Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    22Item 7A.
    
    Qualitative and Quantitative Disclosures About Market Risk
    
    33Item 8.
    
    Financial Statements and Supplementary Data
    
    34Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
    
    68Item 9A.
    
    Controls and Procedures
    
    68Item 9B.
    
    Other Information
    
    69PART IIIItem 10.
    
    Directors, Executive Officers, and Corporate Governance
    
    70Item 11.
    
    Executive Compensation
    
    70Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    70Item 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    70Item 14.
    
    Principal Accountant Fees and Services
    
    71PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    72Signatures
    
    76Exhibit Index
    
    77EX-21.1EX-23.1EX-23.2EX-24.1EX-31.1EX-31.2EX-32.1EX-32.2
  1




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PART I
 
 Item 1. Business
  Overview
  
    
    solutions-based sales providing turnkey, high-quality, energy-efficient lighting
application alternatives primarily to the existing public-sector building market; and
    
    product-based sales providing military, general commercial and industrial lighting and
pool lighting offerings, each of which markets and sells energy-efficient lighting systems.
     
    
    Dramatic reduction of unabsorbed manufacturing and fixed overhead costs.
    
    Leveraging our fundamental intellectual property and government research to create
extremely energy-efficient illumination products for existing buildings. We are currently
developing Intellitube, an intelligent LED lamp to replace linear fluorescent lamps for
general illumination. The LED replacement lamp is designed to reduce energy consumption by
more than 80% while delivering superior lighting qualities.
    
    Establishing a national sales and delivery vehicle into the existing building market
through the acquisition of lighting retrofit companies: We completed our first full year
with Stones River Companies, LLC (SRC), a well established lighting retrofit company,
which we acquired on December 31, 2009, that primarily services the Southeastern region of
the United States. We anticipate further growth through expansion of SRCs geographical
coverage and, possibly, through one or more subsequent acquisitions across the United
States.
  Business Unit: Stones River Companies, LLCOfferings: Application design, engineering, project management, and turnkey lighting and
solar retrofits.Target Market: Energy Services Companies (ESCOs) selling into Fortune 100 corporate
clients and public sector existing buildings such as: schools, universities, hospitals, and
public office buildings at the federal, state and local level.
 2




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Business Unit: Energy Focus Government Contracts and SalesOfferings: Solid state lighting technologies and products to the United States Military.Target Market: United States Navy, United States Army and any other Federal Military unit.Business Unit: US Products which include:
 Fiberstars Pool and SpaOfferings: Decorative lighting and related products to the United States pool market.Target Market: United States pool new construction market and existing market
upgrades.
 Fiberstars CommercialOfferings: Premier energy-efficient lighting products; decorative architectural
lighting products including LED and fiber optic technologies.Target Market: Corporate accounts including, distribution centers, warehouses,
manufacturing, food and clothing retail, and cold storage; decorative lighting for
new commercial buildings.
 Business Unit: Crescent Lighting LimitedOfferings: Decorative and specialty lighting products including LED and fiber optic
technologies.Target Market: New commercial building decorative lighting market in Europe, Asia, and the
Middle East.
 Products
  
    
    LED docklights,
    
    LED parking garage lamps and fixtures,
    
    LED cold storage globe lamps and LED fiber optic lighting systems,
    
    LED landscape fixtures,
    
    LED replacements for linear fluorescent lamps,
    
    LED lamps and fixtures (e.g. pool PAL lights), and
    
    7 Families of LED fixtures to serve the US Navy.
   
    
    Many of our products meet the lighting efficiency standards mandated for the year 2020.
    
    Our products qualify for federal and state tax incentives for commercial and residential
consumers in certain states.
    
    Many of our products make use of proprietary optical and electronics delivery systems
which enable high efficiencies with superior lighting qualities.
 Long-Term Strategy
   
    
    fundamental intellectual property and trade secrets in non-imaging optics and
coatings,
    
    a broad and intimate understanding of lighting technologies,
    
    proven ability to develop systems which efficiently create, transport, and display
light,
    
    a superior understanding of the existing building market drivers and the evolution
towards green lighting products and energy-efficient lighting systems that maximize
customer ROI,
    
    core competencies in execution of all facets of solutions sales, and
    
    strong relationships with the federal government for research and development.
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
    
    Intensifying our focus on the existing building market. On December 31, 2009, we
completed our acquisition of SRC to obtain a sales and delivery vehicle into the public
sector existing building market. In 2010, our SRC business accounted for approximately
56% of our revenues.
    
    Developing mainstream lighting technologies that directly compete against linear
fluorescent general illumination lamps and
    
    Continuing to reduce our operating expenses.
  
    
    A continued positive impact to our cash flow and sales growth due to the SRC
business unit,
    
    Our sales growth, cost reduction initiatives and additional selected financing
facilities, will provide adequate operating funds for organic growth,
    
    The formation of a streamlined organization that is focused on creating economic
value through turnkey energy-efficient lighting system and solutions for existing
building owners,
    
    Development of military grade LED lighting products for the US Armed Forces,
    
    Development of mainstream lighting products for the existing building market that are
not currently available and are differentiated by their performance, energy consumption,
longevity, and controllability, and
    
    A platform for continued growth within the public building sector through the
acquisition of SRC. This will allow us to take advantage of the opportunity created by
Energy Savings Performance Contracts legislation at the State and Federal level, and
state and federal utility stimulus packages available in public sector markets.
 Sales, Marketing, and Distribution of our Offerings Portfolio
 Products
   Solutions
     4




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Manufacturing and Suppliers
   Research and Development
    2010:
 2009:
 5




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2008:
 Intellectual Property
    Backlog
  6




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Competition
    Insurance and Bonding
  Employees
   Business Segments
  7




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Available Information
 www.efoi.com
 Forward-looking Statements
  ® ® ® ® ®
  8




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Item 1A. Risk Factors
 We have a history of operating losses and may incur losses in the future.
   
    
    obtain financing from traditional or non-traditional investment capital organizations
or individuals,
    
    potential sale or divestiture of one or more operating units, and
    
    obtain funding from the sale of our common stock or other equity or debt instruments.
  
    
    loans or other debt instruments may have terms and/or conditions, such as interest rate,
restrictive covenants, and control or revocation provisions, which are not acceptable to
management or our Board of Directors,
    
    the current economic environment combined with our capital constraints may prevent us
from being able to obtain any debt financing,
    
    financing may not be available for parties interested in pursuing the acquisition of one
or more of our operating units, and
    
    additional equity financing may not be available to us in the current economic
environment and could lead to further dilution of shareholder value for current
shareholders of record.
 Downturns in general economic conditions and construction trends could continue to materially and
adversely affect our business.
  An inability to obtain bonding could limit the number of projects we are able to pursue.
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We may not fully recognize the anticipated revenue reported in our solutions-based backlog.
  If we are unable to accurately estimate the risks, revenues or costs associated with a project, we
may achieve a lower than expected profit or incur a loss on that project.
   The percentage-of-completion method of accounting for contract revenues may result in material
adjustments, which could result in a charge against earnings.
  We have significant international sales and are subject to risks associated with operating in
international markets.
  
    
    unexpected changes in regulatory requirements, tariffs and other trade barriers or
restrictions,
    
    longer accounts receivable payment cycles and the difficulty of enforcing contracts and
collecting receivables through certain foreign legal systems,
    
    difficulties in managing and staffing international operations,
    
    potentially adverse tax consequences,
    
    the burdens of compliance with a wide variety of foreign laws,
    
    import and export license requirements and restrictions of the United States and each
other country in which we operate,
    
    exposure to different legal standards and reduced protection for intellectual property
rights in some countries,
    
    currency fluctuations and restrictions,
    
    political, social and economic instability, including war and the threat of war, acts of
terrorism, pandemics, boycotts, curtailment of trade or other business restrictions,
    
    periodic foreign economic downturns, and
    
    sales variability as a result of fluctuations in foreign currency exchange rates.
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If we are unable to respond effectively as new lighting technologies and market trends emerge, our
competitive position and our ability to generate revenue and profits may be harmed.
  If we are not able to compete effectively against companies with greater resources, our prospects
for future success will be jeopardized.
    We have made strategic acquisitions in the past and intend to do so in the future, which may
adversely affect our operating results, financial condition, and existing business.
  
    
    the availability of suitable candidates,
    
    competition from other companies for the purchase of available candidates,
    
    our ability to value those candidates accurately and negotiate favorable terms for those
acquisitions,
    
    the availability of funds to finance acquisitions,
    
    the ability to establish new informational, operational and financial systems to meet
the needs of our business,
    
    the ability to achieve anticipated synergies, including with respect to complementary
products or services, and
    
    the availability of management resources to oversee the integration and operation of the
acquired businesses.
  11




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Our inability to successfully integrate businesses we acquire could have adverse consequences
on our business.
  
    
    loss of key employees or customers,
    
    possible inconsistencies in standards, controls, procedures and policies among the
combined companies and the need to implement company-wide financial, accounting,
information and other systems,
    
    failure to maintain the quality of services that the companies have historically
provided,
    
    coordinating sales, distribution, and marketing functions,
    
    the need to coordinate geographically diverse organizations, and
    
    the diversion of managements attention from our day-to-day business as a result of the
need to deal with any disruptions and difficulties and the need to add management resources
to do so.
  If we are unable to obtain and adequately protect our intellectual property rights, our ability to
commercialize our products could be substantially limited.
    If critical components that we currently purchase from a small number of third-party suppliers
become unavailable or third-party manufacturers otherwise experience delays, we may incur delays in
shipment, which would damage our business.
  12




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If the companies to which we outsource the manufacture of our products fail to meet our
requirements for quality, quantity and timeliness, our revenue and reputation in the marketplace
could be harmed.
   
    
    lack of direct control over production capacity and delivery schedules,
    
    lack of direct control over quality assurance, manufacturing yields and production
costs,
    
    risk of loss of inventory while in transit from China, Mexico, India, Japan, and Taiwan,
and
    
    risks associated with international commerce, particularly with China, Mexico, India,
Japan, and Taiwan, including unexpected changes in legal and regulatory requirements,
changes in tariffs and trade policies, risks associated with the protection of intellectual
property and political and economic instability.
  We depend on independent distributors and sales representatives for a substantial portion of our
net sales, and the failure to manage successfully our relationships with these third parties, or
the termination of these relationships, could cause our net sales to decline and harm our business.
  13




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Our products could contain defects or they may be installed or operated incorrectly, which could
reduce sales of those products or result in claims against us.
  If we are unable to attract or retain qualified personnel, our business and product development
efforts could be harmed.
  A significant portion of our business is dependent upon the existence of government funding, which
may not be available into the future and could result in a significant reduction in sales and could
cause significant harm to our business.
  We believe that certification and compliance issues are critical to adoption of our lighting
systems, and failure to obtain such certification or compliance would harm our business.
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We must comply with regulatory requirements regarding internal control over financial reporting,
corporate governance and public disclosure, which will cause us to incur significant costs and our
failure to comply with these requirements could cause our stock price to decline.
  We have not been in compliance with the continued listing requirements of the NASDAQ Stock Market.
     We could issue additional common stock, which might dilute the book value of our common stock.
  15




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We may need to request our shareholders to authorize additional shares of common stock in
connection with subsequent equity finance or acquisition transactions.
  Shares eligible for future sale may adversely affect the market for our common stock.
   As a thinly-traded stock, large sales can and have placed negative pressure on our common stock
price.
  We may be subject to legal claims against us or claims by us which could have a significant impact
on our resulting financial performance.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
   16




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Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  17




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Executive Officers of the Registrant
  Name
    
    Age
    
    Current Position and Business ExperienceJoseph G. Kaveski
    
    
    50
    
    
    Chief Executive Officer and Director May,
2008 to present. Prior to joining Energy
Focus, Mr. Kaveski led his own strategic
consulting business, TGL Company. As a
consultant he worked with equity investors and
publicly traded companies on strategic
initiatives and planning. Other corporations
Mr. Kaveski has worked for include Johnson
Controls, Inc. where he was Vice President of
Energy Management Services and Strategic
Projects.John M. Davenport
    
    
    65
    
    
    President and Director May 2008 to present.
Chief Executive Officer  July, 2005 to May,
2008. Chief Operating Officer  July, 2003 to
July, 2005. Vice President and Chief
Technology Officer  November, 1999 to July,
2003. Prior to joining Energy Focus, Mr.
Davenport served as the president of Unison
Fiber Optic Lighting Systems, LLC from 1998 to
1999. Before that, Mr. Davenport served at GE
Lighting in various capacities for 25 years.Eric W. Hilliard
    
    
    43
    
    
    Chief Operating Officer, interim Chief
Financial Officer and Vice President
November, 2006 to present. Prior to joining
Energy Focus, Mr. Hilliard served as a Business
Manager at Saint Gobains Aerospace Flight
Structures Division from 2002 to 2006,
overseeing the global sales and operation for
composite flight structure components to
customers such as Embraer, Gulfstream, and
EADS. Other career assignments include
Goodrich Aerospace, Chemical Leaman, and the HJ
Heinz Company serving in operational and
international roles throughout his career.Frank Lamanna
    
    
    47
    
    
    Corporate Controller and interim Chief
Accounting Officer November 2008 to present.
Prior to joining Energy Focus, Mr. Lamanna
served as Corporate Controller for a private
lighting products distributor from 2005 to
2008. In addition, Mr. Lamanna also served as
Chief Financial Officer of a publicly traded
services company and is a Certified Public
Accountant in the State of Ohio.Roger F. Buelow
    
    
    38
    
    
    Chief Technology Officer and Vice President
July, 2005 to present. Vice President of
Engineering from February, 2003 to July, 2005.
Prior to joining Energy Focus, Mr. Buelow was
the director of engineering at Unison Fiber
Optic Lighting Systems, LLC from 1998 to 1999.
 18




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PART II
 
 Item 5. Market for the Registrants Common Equity, Related Stockholder Matters, and Issuer
Purchases of Equity Securities
  High
    
    
    LowFirst quarter 2009
    
    $
    1.86
    
    
    $
    0.62Second quarter 2009
    
    
    1.21
    
    
    
    0.56Third quarter 2009
    
    
    1.49
    
    
    
    0.50Fourth quarter 2009
    
    
    1.04
    
    
    
    0.47First quarter 2010
    
    $
    1.50
    
    
    $
    0.65Second quarter 2010
    
    
    1.50
    
    
    
    0.97Third quarter 2010
    
    
    2.68
    
    
    
    1.20Fourth quarter 2010
    
    
    1.55
    
    
    
    0.90
   Stockholder Matters
     19




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Cumulative Total Return Comparison
  
 20




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Item 6. Selected Financial Data
  SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
 YEARS ENDED DECEMBER 31,
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006OPERATING SUMMARYNet sales from continuing operations
    
    $
    35,129
    
    
    $
    12,489
    
    
    $
    20,032
    
    
    $
    19,761
    
    
    $
    24,038Gross profit from continuing operations
    
    
    6,403
    
    
    
    2,040
    
    
    
    4,106
    
    
    
    5,057
    
    
    
    6,139Net loss from continuing operations
    
    
    (8,517
    )
    
    
    (9,814
    )
    
    
    (12,673
    )
    
    
    (10,987
    )
    
    
    (9,329
    )Net loss from discontinued operations
    
    
    
    
    
    
    (1,201
    )
    
    
    (1,775
    )
    
    
    (330
    )
    
    
    (321
    )Net loss
    
    
    (8,517
    )
    
    
    (11,015
    )
    
    
    (14,448
    )
    
    
    (11,317
    )
    
    
    (9,650
    )Net loss per share:Basic
    
    $
    (0.37
    )
    
    $
    (0.70
    )
    
    $
    (1.02
    )
    
    $
    (0.98
    )
    
    $
    (0.85
    )Diluted
    
    $
    (0.37
    )
    
    $
    (0.70
    )
    
    $
    (1.02
    )
    
    $
    (0.98
    )
    
    $
    (0.85
    )Shares used in per share calculation:Basic
    
    
    22,791
    
    
    
    15,763
    
    
    
    14,182
    
    
    
    11,500
    
    
    
    11,385Diluted
    
    
    22,791
    
    
    
    15,763
    
    
    
    14,182
    
    
    
    11,500
    
    
    
    11,385FINANCIAL POSITION SUMMARYTotal assets
    
    $
    20,374
    
    
    $
    17,378
    
    
    $
    23,636
    
    
    $
    29,104
    
    
    $
    40,652Cash and cash equivalents
    
    
    4,107
    
    
    
    1,062
    
    
    
    10,568
    
    
    
    8,412
    
    
    
    15,968Credit line borrowings
    
    
    
    
    
    
    
    
    
    
    1,904
    
    
    
    1,159
    
    
    
    1,124Current portion of long-term borrowings
    
    
    481
    
    
    
    
    
    
    
    54
    
    
    
    1,726
    
    
    
    780Long-term borrowings
    
    
    1,344
    
    
    
    715
    
    
    
    245
    
    
    
    314
    
    
    
    1,860Shareholders equity
    
    
    6,658
    
    
    
    11,505
    
    
    
    16,789
    
    
    
    21,618
    
    
    
    30,880Common shares outstanding
    
    
    23,962
    
    
    
    21,250
    
    
    
    14,835
    
    
    
    11,623
    
    
    
    11,394
 21




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
  
    
    solutions-based sales providing turnkey, high-quality, energy-efficient lighting
application alternatives primarily to the existing public-sector building market; and
    
    product-based sales providing military, general commercial and industrial lighting and
pool lighting offerings, each of which markets and sells energy-efficient lighting systems.
   
    
    Dramatic reductions of unabsorbed manufacturing and fixed overhead costs.
    
    Leveraging our fundamental intellectual property and government research to create
extremely energy-efficient illumination products for existing buildings. We are currently
developing IntellitubeTM, an intelligent LED lamp to replace linear
fluorescent lamps for general illumination. The LEDreplacement lamp is
designed to reduce energy consumption by more than 80% while delivering superior lighting
qualities.
    
    Establishing a national sales and delivery vehicle into the existing building market
through the acquisition of lighting retrofit companies. We completed our first full year
with Stones River Companies, LLC (SRC), a well established lighting retrofit company,
which we acquired on December 31, 2009, that primarily services the Southeastern region of
the United States. We anticipate further growth through expansion of SRCs geographical
coverage and, possibly, through one or more subsequent acquisitions across the United
States.
  TM  TM
 Results of Operations
 Cash Accumulation
  22




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Net Sales
  Year ending December 31,2010
    
    
    2009
    
    
    2008Solutions:Net sales  solutions
    
    $
    19,763
    
    
    $
    
    
    
    $
    Products:Net sales  pool and commercial
    
    
    12,265
    
    
    
    11,561
    
    
    
    18,362Net sales  government products/R&D services
    
    
    3,101
    
    
    
    928
    
    
    
    1,670Total net sales  product segment
    
    
    15,366
    
    
    
    12,489
    
    
    
    20,032Total net sales from continuing operations
    
    $
    35,129
    
    
    $
    12,489
    
    
    $
    20,032
   International Sales
  Year ending December 31,2010
    
    
    2009
    
    
    2008United States Domestic
    
    $
    31,314
    
    
    $
    7,930
    
    
    $
    12,902International
    
    
    3,815
    
    
    
    4,559
    
    
    
    7,130Total net sales from continuing operations
    
    $
    35,129
    
    
    $
    12,489
    
    
    $
    20,032
 Gross Profit
  23




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Operating Expenses
 Research and Development
       Year ending December 31,Net Research & Development Spending
    
    2010
    
    
    2009
    
    
    2008Revenues
    
    $
    3,101
    
    
    $
    928
    
    
    $
    1,670ExpensesGross Research & Development Expenses
    
    
    (579
    )
    
    
    (1,081
    )
    
    
    (1,132
    )Credits from Government Contracts
    
    
    781
    
    
    
    762
    
    
    
    895Net Research & Development Income / (Expense)
    
    $
    202
    
    
    $
    (319
    )
    
    $
    (237
    )
 Sales and Marketing
   24




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General and Administrative
   Loss on impairment
  IntangiblesGoodwill and Others
 Valuation of Equity Instruments
  Restructuring
  Other Income and Expenses
   Discontinued Operations
  25




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Income Taxes
   Net Loss
   Liquidity and Capital Resources
 Cash and Cash Equivalents
   26




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Cash Provided by (Used in) Operating Activities
   Cash (Used in) Provided by Investing Activities
  Cash Provided by Financing Activities
    27




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Contractual Obligations
  United States
    
    
    Non-CancelableLong-Term
    
    
    OperatingYear ending December 31,
    
    Borrowings
    
    
    Leases
    
    
    Total2011
    
    $
    550
    
    
    $
    801
    
    
    $
    1,3512012
    
    
    
    
    
    
    558
    
    
    
    5582013
    
    
    1,650
    
    
    
    560
    
    
    
    2,2102014
    
    
    
    
    
    
    181
    
    
    
    1812015 and thereafter
    
    
    70
    
    
    
    108
    
    
    
    178Total contractual obligations, gross
    
    
    2,270
    
    
    
    2,208
    
    
    
    4,478Less: discounts on long-term borrowings and sublease payments
    
    
    (445
    )
    
    
    
    
    
    
    (445
    )Total contractual obligations, net
    
    $
    1,825
    
    
    $
    2,208
    
    
    $
    4,033
  Off-Balance Sheet Arrangements
  29




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##### Table of Contents



Going Concern
   
    
    obtain financing from traditional or non-traditional investment capital organizations or individuals,
    
    potential sale or divestiture of one or more operating units, and
    
    obtain funding from the sale of our common stock or other equity instruments.
  
    
    loans or other debt instruments may have terms and/or conditions, such as interest rate,
restrictive covenants, and control or revocation provisions, which are not acceptable to
management or our Board of Directors,
    
    the current economic environment combined with our capital constraints may
prevent us from being able to obtain any debt financing,
    
    financing may not be available for parties interested in pursuing the acquisition of one
or more of our operating units, and
    
    additional equity financing may not be available to us in the current economic
environment and could lead to further dilution of shareholder value for current
shareholders of record.
 Critical Accounting Policies and Estimates
  
    
    Revenue recognition;
    
    Allowances for doubtful accounts, returns and discounts;
    
    Impairment of long-lived assets;
    
    Valuation of inventories;
    
    Accounting for income taxes; and
    
    Share-Based compensation.
 Revenue Recognition
  
    
    persuasive evidence or an arrangement exists, e.g., a sales order, a purchase order, or
a sales agreement,
    
    shipment has occurred, with the standard shipping term being F.O.B. ship point, or
services provided on a proportional performance basis or installation has been completed,
    
    price to the buyer is fixed or determinable, and
    
    collectability is reasonably assured.
 30




---



##### Table of Contents




    
    all sales made by the Company to its customer base are non-contingent, meaning that they
are not tied to that customers resale of products,
    
    standard terms of sale contain shipping terms of F.O.B. ship point, meaning that title
is transferred when shipping occurs, and
    
    there are no automatic return provisions that allow the customer to return the product
in the event that the product does not sell within a defined timeframe.
  
    
    product sale at completion of installation, and
    
    installation service at completion of installation.
    Allowances for Doubtful Accounts, Returns, and Discounts
  
    
    Allowance for doubtful accounts for accounts receivable, and
    
    Allowance for sales returns.
   Long-lived Assets
  31




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##### Table of Contents



Valuation of Inventories
  Accounting for Income Taxes
   Share-Based Payments
 Compensation  Stock Compensation
 32




---



##### Table of Contents



Recently Issued Accounting Pronouncements
  
 Item 7A. Qualitative and Quantitative Disclosures About Market Risk
  33




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 TABLE OF CONTENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    35Report of Previous Independent Registered Public Accounting Firm
    
    
    36Consolidated Balance Sheets as of December 31, 2010 and 2009
    
    
    37Consolidated Statements of Operations for the years ended December 31, 2010, 2009, and 2008
    
    
    38Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2010, 2009, and 2008
    
    
    39Consolidated Statements of Shareholders Equity for the years ended December 31, 2010, 2009, and 2008
    
    
    40Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009, and 2008
    
    
    41Notes to Consolidated Financials Statements for the years ended December 31, 2010, 2009, and 2008
    
    
    43
 34




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
 35




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
 36




---



##### Table of Contents



ENERGY
FOCUS, INC.
 
 CONSOLIDATED BALANCE SHEETS
As of December 31,  (amounts in thousands except share and per share amounts)
 2010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    4,107
    
    
    $
    1,062Accounts receivable trade, net of allowances of $446 in 2010
and $395 in 2009
    
    
    5,483
    
    
    
    2,922Retainage receivable
    
    
    731
    
    
    
    Inventories, net
    
    
    2,543
    
    
    
    3,770Costs in excess of billings
    
    
    22
    
    
    
    Prepaid and other current assets
    
    
    632
    
    
    
    509Total current assets
    
    
    13,518
    
    
    
    8,263Property and equipment, net
    
    
    2,446
    
    
    
    3,091Goodwill
    
    
    672
    
    
    
    672Intangible assets, net
    
    
    1,677
    
    
    
    2,750Collateralized assets
    
    
    2,000
    
    
    
    2,500Other assets
    
    
    61
    
    
    
    102Total assets
    
    $
    20,374
    
    
    $
    17,378LIABILITIESCurrent liabilities:Accounts payable
    
    $
    7,167
    
    
    $
    1,677Accrued liabilities
    
    
    2,358
    
    
    
    1,854Deferred revenue
    
    
    1,214
    
    
    
    295Billings in excess of costs
    
    
    297
    
    
    
    Current portion of long-term borrowings
    
    
    481
    
    
    
    Total current liabilities
    
    
    11,517
    
    
    
    3,826Other deferred liabilities
    
    
    28
    
    
    
    149Acquisition-related contingent liabilities
    
    
    827
    
    
    
    1,183Long-term borrowings
    
    
    1,344
    
    
    
    715Total liabilities
    
    
    13,716
    
    
    
    5,873SHAREHOLDERS EQUITYPreferred stock, par value $0.0001 per share:Authorized: 2,000,000 shares in 2010 and 2009
Issued and outstanding: no shares in 2010 and 2009
    
    
    
    
    
    
    Common stock, par value $0.0001 per share:Authorized: 60,000,000 shares in 2010 and 30,000,000 in 2009
Issued and outstanding: 23,962,000 in 2010 and 21,250,000 in 2009
    
    
    1
    
    
    
    1Additional paid-in capital
    
    
    75,094
    
    
    
    71,373Accumulated other comprehensive income
    
    
    423
    
    
    
    474Accumulated deficit
    
    
    (68,860
    )
    
    
    (60,343
    )Total shareholders equity
    
    
    6,658
    
    
    
    11,505Total liabilities and shareholders equity
    
    $
    20,374
    
    
    $
    17,378
  37




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##### Table of Contents



ENERGY
FOCUS, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31,  (amounts in thousands except per share amounts)
 2010
    
    
    2009
    
    
    2008Net sales
    
    $
    35,129
    
    
    $
    12,489
    
    
    $
    20,032Cost of sales
    
    
    28,726
    
    
    
    10,449
    
    
    
    15,926Gross profit
    
    
    6,403
    
    
    
    2,040
    
    
    
    4,106Operating expenses:Research and development
    
    
    (202
    )
    
    
    319
    
    
    
    237Sales and marketing
    
    
    6,415
    
    
    
    6,044
    
    
    
    8,081General and administrative
    
    
    6,115
    
    
    
    5,333
    
    
    
    5,443Loss on impairment
    
    
    156
    
    
    
    
    
    
    
    3,195Valuation of equity instruments
    
    
    1,812
    
    
    
    
    
    
    
    Restructuring
    
    
    26
    
    
    
    125
    
    
    
    Total operating expenses
    
    
    14,322
    
    
    
    11,821
    
    
    
    16,956Loss from operations
    
    
    (7,919
    )
    
    
    (9,781
    )
    
    
    (12,850
    )Other income (expense):Other (expense) income
    
    
    (25
    )
    
    
    47
    
    
    
    (91
    )Interest (expense) income
    
    
    (567
    )
    
    
    (73
    )
    
    
    18Loss from continuing operations before income taxes
    
    
    (8,511
    )
    
    
    (9,807
    )
    
    
    (12,923
    )(Provision for) benefit from income taxes
    
    
    (6
    )
    
    
    (7
    )
    
    
    250Net loss from continuing operations
    
    $
    (8,517
    )
    
    $
    (9,814
    )
    
    $
    (12,673
    )Discontinued operations:Loss before income taxes of discontinued operations, including
loss on disposal of discontinued operations of $664 in
2009
    
    
    
    
    
    
    (1,201
    )
    
    
    (1,775
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    Loss from discontinued operations
    
    
    
    
    
    
    (1,201
    )
    
    
    (1,775
    )Net loss
    
    $
    (8,517
    )
    
    $
    (11,015
    )
    
    $
    (14,448
    )Net loss per share  basic and diluted
    
    $
    (0.37
    )
    
    $
    (0.70
    )
    
    $
    (1.02
    )Shares used in computing net loss per share 
basic and diluted
    
    
    22,791
    
    
    
    15,763
    
    
    
    14,182
  38




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##### Table of Contents



ENERGY
FOCUS, INC.
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the years ended December 31,
 (amounts in thousands)
 2010
    
    
    2009
    
    
    2008Net loss
    
    $
    (8,517
    )
    
    $
    (11,015
    )
    
    $
    (14,448
    )Other comprehensive income (loss):Foreign currency translation adjustments
    
    
    (51
    )
    
    
    223
    
    
    
    (564
    )Comprehensive loss
    
    $
    (8,568
    )
    
    $
    (10,792
    )
    
    $
    (15,012
    )
  39




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##### Table of Contents



ENERGY
FOCUS, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
For the years ended December 31, 2010, 2009, and 2008
 (amounts in thousands)
 Accumulated
    
    
    RetainedAdditional
    
    
    Other
    
    
    EarningsCommon Stock
    
    
    Paid-in
    
    
    Comprehensive
    
    
    (AccumulatedShares
    
    
    Amount
    
    
    Capital
    
    
    Income
    
    
    Deficit)
    
    
    TotalBalances at December
31, 2007
    
    
    11,623
    
    
    $
    1
    
    
    $
    55,682
    
    
    $
    815
    
    
    $
    (34,880
    )
    
    $
    21,618Private investment
public equity, net of
expenses
    
    
    3,184
    
    
    
    
    
    
    
    9,335
    
    
    
    
    
    
    
    
    
    
    
    9,335Exercise of common
stock options
    
    
    23
    
    
    
    
    
    
    
    126
    
    
    
    
    
    
    
    
    
    
    
    126Issuance of common
stock under employee
stock option purchase
plan
    
    
    5
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    7Stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    715
    
    
    
    
    
    
    
    
    
    
    
    715Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (564
    )
    
    
    
    
    
    
    (564
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,448
    )
    
    
    (14,448
    )Balances at December
31, 2008
    
    
    14,835
    
    
    $
    1
    
    
    $
    65,865
    
    
    $
    251
    
    
    $
    (49,328
    )
    
    $
    16,789Issuance of common
stock under rights
offering
    
    
    5,168
    
    
    
    
    
    
    
    3,344
    
    
    
    
    
    
    
    
    
    
    
    3,344Issuance of common
stock
    
    
    228
    
    
    
    
    
    
    
    153
    
    
    
    
    
    
    
    
    
    
    
    153Issuance of common
stock under employee
stock option purchase
plan
    
    
    19
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    11Issuance of common
stock for acquisition
of subsidiary
    
    
    1,000
    
    
    
    
    
    
    
    1,239
    
    
    
    
    
    
    
    
    
    
    
    1,239Stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    624
    
    
    
    
    
    
    
    
    
    
    
    624Warrants issued for
financing
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    
    
    
    
    
    
    
    
    137Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    223
    
    
    
    
    
    
    
    223Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,015
    )
    
    
    (11,015
    )Balances at December
31, 2009
    
    
    21,250
    
    
    $
    1
    
    
    $
    71,373
    
    
    $
    474
    
    
    $
    (60,343
    )
    
    $
    11,505Issuance of common
stock under rights
offering
    
    
    
    
    
    
    
    
    
    
    1,421
    
    
    
    
    
    
    
    
    
    
    
    1,421Issuance of common
stock
    
    
    948
    
    
    
    
    
    
    
    1,195
    
    
    
    
    
    
    
    
    
    
    
    1,195Issuance of common
stock under employee
stock option purchase
plan
    
    
    20
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    15Issuance of common
stock for acquisition
of subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock-based
compensation
    
    
    
    
    
    
    
    
    
    
    552
    
    
    
    
    
    
    
    
    
    
    
    552Stock options exercised
    
    
    14
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    8Warrants issued for
financing
    
    
    
    
    
    
    
    
    
    
    528
    
    
    
    
    
    
    
    
    
    
    
    528Warrants exercised
    
    
    1,730
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51
    )
    
    
    
    
    
    
    (51
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,517
    )
    
    
    (8,517
    )Balances, December 31,
2010
    
    
    23,962
    
    
    $
    1
    
    
    $
    75,094
    
    
    $
    423
    
    
    $
    (68,860
    )
    
    $
    6,658
  40




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##### Table of Contents



ENERGY
FOCUS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
 (amounts in thousands)
 2010
    
    
    2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (8,517
    )
    
    $
    (11,015
    )
    
    $
    (14,448
    )Less: loss from discontinued operations
    
    
    
    
    
    
    (1,201
    )
    
    
    (1,775
    )Net loss from continuing operations
    
    
    (8,517
    )
    
    
    (9,814
    )
    
    
    (12,673
    )Adjustments to reconcile net loss from continuing operations to net
cash provided by (used in) operating activities:Loss on impairment
    
    
    156
    
    
    
    
    
    
    
    3,195Depreciation
    
    
    790
    
    
    
    987
    
    
    
    1,151Stock-based compensation
    
    
    878
    
    
    
    624
    
    
    
    715Valuation of equity instruments
    
    
    1,812
    
    
    
    
    
    
    
    Provision for doubtful accounts receivable
    
    
    44
    
    
    
    45
    
    
    
    (52
    )Amortization of intangible assets
    
    
    1,073
    
    
    
    
    
    
    
    Amortization of discounts on long-term borrowings
    
    
    349
    
    
    
    
    
    
    
    Deferred taxes
    
    
    
    
    
    
    
    
    
    
    (255
    )Deferred revenue
    
    
    1,215
    
    
    
    104
    
    
    
    (52
    )Gain on disposal of fixed assets
    
    
    (22
    )
    
    
    44
    
    
    
    Changes in assets and liabilities:Accounts receivable, inventories, and
other assets
    
    
    (1,694
    )
    
    
    (906
    )
    
    
    1,374Accounts payable and accrued liabilities
    
    
    5,409
    
    
    
    (1,225
    )
    
    
    902Total adjustments
    
    
    10,010
    
    
    
    (327
    )
    
    
    6,978Net cash provided by (used in) continuing operations
    
    
    1,493
    
    
    
    (10,141
    )
    
    
    (5,695
    )Net cash used in discontinued operations
    
    
    
    
    
    
    (421
    )
    
    
    (135
    )Net cash provided by (used in) operating activities
    
    
    1,493
    
    
    
    (10,562
    )
    
    
    (5,830
    )Cash flows from investing activities:Cash paid for acquisition of subsidiary
    
    
    
    
    
    
    (1,500
    )
    
    
    Proceeds from the sale of fixed assets
    
    
    50
    
    
    
    
    
    
    
    Acquisition of fixed assets
    
    
    (332
    )
    
    
    (182
    )
    
    
    (358
    )Net cash used in continuing investing activities
    
    
    (282
    )
    
    
    (1,682
    )
    
    
    (358
    )Net cash provided by (used in) discontinued investing
activities
    
    
    
    
    
    
    765
    
    
    
    (37
    )Net cash used in investing activities
    
    
    (282
    )
    
    
    (917
    )
    
    
    (395
    )Cash flows from financing activities:Proceeds from issuances of common stock, net
    
    
    669
    
    
    
    3,508
    
    
    
    9,335Proceeds from exercise of stock options
    
    
    8
    
    
    
    
    
    
    
    133Proceeds from other borrowings
    
    
    1,150
    
    
    
    620
    
    
    
    Net (repayments) / proceeds on credit line borrowings
    
    
    
    
    
    
    (1,776
    )
    
    
    802Net repayments on bank borrowings
    
    
    
    
    
    
    
    
    
    
    (1,672
    )Net cash provided by continuing financing activities
    
    
    1,827
    
    
    
    2,352
    
    
    
    8,598Net cash used in discontinued financing activities
    
    
    
    
    
    
    (428
    )
    
    
    (105
    )Net cash provided by financing activities
    
    
    1,827
    
    
    
    1,924
    
    
    
    8,493Effect of exchange rate changes on cash
    
    
    7
    
    
    
    49
    
    
    
    (112
    )Net increase (decrease) in cash and cash equivalents
    
    
    3,045
    
    
    
    (9,506
    )
    
    
    2,156Cash and cash equivalents at beginning of year
    
    
    1,062
    
    
    
    10,568
    
    
    
    8,412Cash and cash equivalents at end of year
    
    $
    4,107
    
    
    $
    1,062
    
    
    $
    10,568
  41




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##### Table of Contents



ENERGY FOCUS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
 (amounts in thousands)
 2010
    
    
    2009
    
    
    2008Supplemental InformationInterest paid
    
    $
    171
    
    
    $
    98
    
    
    $
    198Non-cash investing and financing activities:Fully depreciated assets disposed of
    
    $
    1,548
    
    
    $
    1,149
    
    
    $
    35The Company purchased all of the members interest
of Stones River
Companies, LLC for $1,500. In conjunction with the
acquisition,
liabilities were incurred and common stock was
issued as follows:Fair value of assets acquired
    
    $
    
    
    
    $
    4,700
    
    
    $
    Cash paid for the members interest
    
    
    
    
    
    
    (1,500
    )
    
    
    Liabilities incurred and common stock issued
    
    $
    
    
    
    $
    3,200
    
    
    $
    
  42




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##### Table of Contents



ENERGY
FOCUS, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 1. Nature of Operations
  
    
    solutions-based sales providing turnkey, high-quality, energy-efficient lighting
application alternatives primarily to the existing public-sector building market; and
    
    product-based sales providing military, general commercial and industrial lighting and
pool lighting offerings, each of which markets and sells energy-efficient lighting systems.
   2. Summary of Significant Accounting Policies
  Use of Estimates
  Reclassifications
  Basis of Presentation
  43




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 Going Concern
   
    
    obtain financing from traditional or non-traditional investment capital organizations or
individuals,
    
    potential sale or divestiture of one or more operating units, and
    
    obtain funding from the sale of our common stock or other equity or debt instruments.
  
    
    loans or other debt instruments may have terms and/or conditions, such as interest rate,
restrictive covenants, and control or revocation provisions, which are not acceptable to
management or our Board of Directors,
    
    the current economic environment combined with our capital constraints may prevent us
from being able to obtain any debt financing,
    
    financing may not be available for parties interested in pursuing the acquisition of one
or more of our operating units, and
    
    additional equity financing may not be available to us in the current economic
environment and could lead to further dilution of shareholder value for current
shareholders of record.
 Revenue Recognition
  
    
    persuasive evidence or an arrangement exists (e.g., a sales order, a purchase order, or
a sales agreement),
    
    shipment has occurred, with the standard shipping term being F.O.B. ship point, or
services provided on a proportional performance basis or installation have been completed,
    
    price to the buyer is fixed or determinable, and
    
    collectability is reasonably assured.
 products-based
 
    
    all sales made by the Company to its customer base are non-contingent, meaning that they
are not tied to that customers resale of products,
    
    standard terms of sale contain shipping terms of F.O.B. ship point, meaning that title
is transferred when shipping occurs, and
    
    there are no automatic return provisions that allow the customer to return the product
in the event that the product does not sell within a defined timeframe.
 products-based specifically-defined installation
 
    
    product sale at completion of installation, and
    
    installation service at completion of installation.
 44




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
    Cash Equivalents
  Inventories
  Accounts Receivable
  Retainage Receivable
  45




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 Income Taxes
   Collateralized Assets
  Fair Value of Financial Instruments
  Long-Lived Assets
    46




---



##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  Certain Risks and Concentrations
     Research and Development
    47




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 Earnings (Loss) Per Share
   Years ended December 31,2010
    
    
    2009
    
    
    2008Basic and diluted loss per share:Net loss
    
    $
    (8,517
    )
    
    $
    (11,015
    )
    
    $
    (14,448
    )Basic and diluted loss per share:Weighted average shares outstanding
    
    
    22,791
    
    
    
    15,763
    
    
    
    14,182Basic and diluted net loss per share
    
    $
    (0.37
    )
    
    $
    (0.70
    )
    
    $
    (1.02
    )
  Stock-Based Compensation
 Compensation  Stock Compensation
   48




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  2010
    
    
    2009
    
    
    2008Fair value of options issued
    
    $
    0.80
    
    
    $
    0.46
    
    
    $
    1.04Exercise price
    
    $
    1.16
    
    
    $
    0.73
    
    
    $
    1.91Expected life of option
    
    
    4.0 years
    
    
    
    4.0 years
    
    
    
    4.0 yearsRisk-free interest rate
    
    
    1.61
    %
    
    
    1.88
    %
    
    
    2.36
    %Expected volatility
    
    
    98.31
    %
    
    
    88.26
    %
    
    
    72.53
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
     49




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  Foreign Currency Translation
  Advertising Expenses
  Product Warranties
  Year endedDecember 31,2010
    
    
    2009Balance at the beginning of the year
    
    $
    211
    
    
    $
    308Accruals for warranties issued
    
    
    (11
    )
    
    
    290Settlements made during the year (in cash or in kind)
    
    
    (74
    )
    
    
    (387
    )Balance at the end of the year
    
    $
    126
    
    
    $
    211
 Recent Accounting Standards and Pronouncements
 Consolidation (Topic
810)  Accounting and Reporting for Decreases in Ownership of a Subsidiary  A Scope
Clarification
 Revenue Recognition (Topic 605) 
Multiple-Deliverable Revenue Arrangements
 50




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 Fair Value Measurements and Disclosures  Overall
 Generally Accepted Accounting Principles (Topic 105)
 3. Acquisition
     AmortizationLifeAssets acquired:
    
    (in years)
    
    
    AmountAccounts receivable
    
    
    
    
    
    $
    1,258Property and equipment
    
    
    
    
    
    
    20Goodwill
    
    
    n/a
    
    
    
    672Intangible assets:Tradename
    
    
    10
    
    
    
    500Client relationships
    
    
    5
    
    
    
    2,250Total purchase price
    
    
    
    
    
    $
    4,700
 51




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  4. Discontinued Operations
    December 31,2010
    
    
    2009
    
    
    2008Net sales
    
    $
    
    
    
    $
    1,462
    
    
    $
    2,787Total expenses
    
    
    
    
    
    
    2,663
    
    
    
    4,562Loss before income taxes of
discontinued operations
    
    
    
    
    
    
    (1,201
    )
    
    
    (1,775
    )Provision for income tax
    
    
    
    
    
    
    
    
    
    
    Loss from discontinued operations
    
    $
    
    
    
    $
    (1,201
    )
    
    $
    (1,775
    )
 5. Inventories
  December 31,2010
    
    
    2009Raw materials
    
    $
    2,164
    
    
    $
    2,785Inventory reserve
    
    
    (972
    )
    
    
    (1,010
    )Finished goods
    
    
    1,351
    
    
    
    1,995Inventories, net
    
    $
    2,543
    
    
    $
    3,770
 52




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 6. Property and Equipment
  December 31,2010
    
    
    2009Equipment (useful life 3  15 years)
    
    $
    6,328
    
    
    $
    7,856Tooling (useful life 2  5 years)
    
    
    2,507
    
    
    
    2,305Furniture and fixtures (useful life 5 years)
    
    
    161
    
    
    
    168Computer software (useful life 3 years)
    
    
    373
    
    
    
    476Leasehold improvements (the shorter of useful
life or lease life)
    
    
    909
    
    
    
    911Construction in progress
    
    
    14
    
    
    
    Property and equipment at cost
    
    
    10,292
    
    
    
    11,716Less: accumulated depreciation
    
    
    (7,846
    )
    
    
    (8,625
    )Property and equipment, net
    
    $
    2,446
    
    
    $
    3,091
  7. Goodwill and Intangible Assets
  Amortization
    
    
    December 31,Life (in years)
    
    
    2010
    
    
    2009Goodwill
    
    
    n/a
    
    
    $
    672
    
    
    $
    672Definite-lived intangible assets:Tradenames
    
    
    10
    
    
    
    450
    
    
    
    500Customer relationships
    
    
    5
    
    
    
    1,227
    
    
    
    2,250Total definite-lived intangible assets
    
    
    
    
    
    
    1,677
    
    
    
    2,750Total intangible assets, net
    
    
    
    
    
    $
    2,349
    
    
    $
    3,422
  Year ending December 31,
    
    Amount2011
    
    $
    6492012
    
    
    4202013
    
    
    2532014
    
    
    1052015
    
    
    502016 and thereafter
    
    
    200Total amortization expense
    
    $
    1,677
 53




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  IntangiblesGoodwill and Others
 8. Accrued Liabilities (Current)
  December 31,2010
    
    
    2009Accrued sales commissions and incentives
    
    $
    566
    
    
    $
    79Accrued warranty expense
    
    
    126
    
    
    
    211Accrued professional fees
    
    
    92
    
    
    
    282Accrued employee benefits
    
    
    331
    
    
    
    376Accrued interest
    
    
    53
    
    
    
    Accrued rent
    
    
    230
    
    
    
    29Accrued taxes
    
    
    185
    
    
    
    151Accrued performance-related contingent
consideration
    
    
    525
    
    
    
    420Accrued subcontractor services
    
    
    102
    
    
    
    128Accrued other expenses
    
    
    148
    
    
    
    178Total accrued expenses
    
    $
    2,358
    
    
    $
    1,854
 9. Contracts in Progress
  December 31,2010Costs incurred on uncompleted contracts
    
    $
    9,912Estimated earnings
    
    
    3,138Total revenues
    
    
    13,050Less: billings to date
    
    
    13,325Total
    
    $
    (275
    )Balance sheet classification:Costs in excess of billings on uncompleted contracts
    
    $
    22Billings in excess of costs on uncompleted contracts
    
    
    (297
    )Total
    
    $
    (275
    )
 54




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 10. Long-Term Borrowings
       55




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
   Long-TermYear ending December 31,
    
    Borrowings2011
    
    $
    5502012
    
    
    2013
    
    
    1,6502014
    
    
    2015 and thereafter
    
    
    70Gross long-term borrowings
    
    
    2,270Less: discounts on long-term borrowings
    
    
    (445
    )Total commitment, net
    
    $
    1,825
 11. Commitments and Contingencies
  Minimum LeaseYear ending December 31,
    
    Commitments2011
    
    $
    8012012
    
    
    5582013
    
    
    5602014
    
    
    1812015  2017
    
    
    108Total commitment
    
    $
    2,208
   56




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  12. Shareholders Equity
 Warrants
     57




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  Warrants
    
    
    Warrants
    
    
    
    
    
    
    FairOutstanding
    
    
    Outstanding
    
    
    Warrants
    
    
    Value ofCommitments
    
    
    Exercise Price
    
    
    Exerciseable
    
    
    WarrantsBalance, December
31, 2007
    
    
    271,199
    
    
    $
    4.30  4.50
    
    
    
    271,199
    
    
    $
    1,220Warrants issued
    
    
    3,566,440
    
    
    $
    3.08
    
    
    
    3,566,440
    
    
    
    10,985Balance, December
31, 2008
    
    
    3,837,639
    
    
    $
    3.08  4.50
    
    
    
    3,837,639
    
    
    $
    12,205Warrants issued
    
    
    600,000
    
    
    $
    0.65
    
    
    
    
    
    
    
    Balance, December
31, 2009
    
    
    4,437,639
    
    
    $
    0.01  4.50
    
    
    
    3,837,639
    
    
    $
    12,205Warrants issued
    
    
    855,000
    
    
    $
    0.01  1.20
    
    
    
    855,000
    
    
    
    474,700Warrants exercised
    
    
    (1,730,062
    )
    
    $
    0.01
    
    
    
    (1,730,062
    )
    
    
    (1,626,258
    )Warrants cancelled
    
    
    (271,199
    )
    
    $
    4.50
    
    
    
    (271,199
    )
    
    
    Balance, December
31, 2010
    
    
    3,291,378
    
    
    $
    0.01  3.08
    
    
    
    2,691,378
    
    
    $
    494,900
   2004 Stock Incentive Plan
   2008 Stock Incentive Plan
  58




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  WeightedOptions
    
    
    Number of
    
    
    AverageAvailable
    
    
    Options
    
    
    Exercise Pricefor Grant
    
    
    Outstanding
    
    
    Per ShareBalance, December
31, 2007
    
    
    67
    
    
    
    1,276
    
    
    $
    7.07Granted
    
    
    (477
    )
    
    
    477
    
    
    
    1.91Cancelled
    
    
    238
    
    
    
    (238
    )
    
    
    8.22Exercised
    
    
    
    
    
    
    (23
    )
    
    
    3.27Additional shares
reserved
    
    
    1,000
    
    
    
    
    
    
    
    Balance, December
31, 2008
    
    
    828
    
    
    
    1,492
    
    
    $
    5.29Granted
    
    
    (1,146
    )
    
    
    1,146
    
    
    
    0.70Cancelled
    
    
    520
    
    
    
    (520
    )
    
    
    3.35Exercised
    
    
    
    
    
    
    (397
    )
    
    
    0.66Balance, December
31, 2009
    
    
    202
    
    
    
    1,721
    
    
    $
    3.63Granted
    
    
    (1,115
    )
    
    
    1,115
    
    
    
    1.08Cancelled
    
    
    994
    
    
    
    (994
    )
    
    
    1.68Exercised
    
    
    
    
    
    
    (15
    )
    
    
    0.60Restricted Shares
Granted
    
    
    (602
    )
    
    
    
    
    
    
    Additional shares
reserved
    
    
    2,000
    
    
    
    
    
    
    
    Balance, December
31, 2010
    
    
    1,479
    
    
    
    1,827
    
    
    $
    3.36
   OPTIONS OUTSTANDING
    
    
    OPTIONS CURRENTLY EXERCISABLEWeighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    Average
    
    
    WeightedRange of
    
    Number
    
    
    Remaining
    
    
    Average
    
    
    
    
    
    
    Remaining
    
    
    AverageExercise
    
    of Shares
    
    
    Contactual
    
    
    Exercise
    
    
    Number
    
    
    Contactual
    
    
    ExercisePrices
    
    Outstanding
    
    
    Life
    
    
    Price
    
    
    Exercisable
    
    
    Life
    
    
    Price(in thousands)
    
    
    (in years)
    
    
    
    
    
    
    (in thousands)
    
    
    (in years)$0.60  $4.80
    
    
    1,275
    
    
    
    7.7
    
    
    $
    1.58
    
    
    
    662
    
    
    
    6.7
    
    
    $
    1.94$4.91  $7.19
    
    
    329
    
    
    
    6.2
    
    
    $
    6.39
    
    
    
    278
    
    
    
    6.2
    
    
    $
    6.45$7.23  $9.60
    
    
    174
    
    
    
    4.7
    
    
    $
    8.48
    
    
    
    135
    
    
    
    4.5
    
    
    $
    7.81$10.64  $12.00
    
    
    49
    
    
    
    4.5
    
    
    $
    11.14
    
    
    
    49
    
    
    
    4.5
    
    
    $
    11.141,827
    
    
    
    
    
    
    
    
    
    
    
    1,124
 1994 Employee Stock Purchase Plan
  59




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 Shareholder Rights Plan
   60




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 13. Income Taxes
 Accounting for Uncertainty in Income Taxes
    Years ended December 31,2010
    
    
    2009
    
    
    2008CurrentFederal
    
    $
    
    
    
    $
    
    
    
    $
    Foreign
    
    
    
    
    
    
    
    
    
    
    State
    
    
    (10
    )
    
    
    (3
    )
    
    
    (6
    )(10
    )
    
    
    (3
    )
    
    
    (6
    )DeferredFederal
    
    
    
    
    
    
    
    
    
    
    238Foreign
    
    
    4
    
    
    
    (4
    )
    
    
    4State
    
    
    
    
    
    
    
    
    
    
    144
    
    
    
    (4
    )
    
    
    256(Provision for) benefit from income
taxes
    
    $
    (6
    )
    
    $
    (7
    )
    
    $
    250
  December 31,2010
    
    
    2009
    
    
    2008United States
    
    $
    (8,410
    )
    
    $
    (9,902
    )
    
    $
    (13,039
    )Foreign subsidiaries
    
    
    (101
    )
    
    
    95
    
    
    
    116Pretax loss from continuing operations
    
    $
    (8,511
    )
    
    $
    (9,807
    )
    
    $
    (12,923
    )
  Years ended December 31,2010
    
    
    2009
    
    
    2008United States statutory rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State taxes (net of federal tax
benefit)
    
    
    (0.1
    %)
    
    
    
    %
    
    
    
    %Valuation allowance
    
    
    (33.7
    %)
    
    
    (35.7
    %)
    
    
    (31.1
    %)Other
    
    
    (0.3
    %)
    
    
    1.6
    %
    
    
    (1.2
    %)(0.1
    %)
    
    
    (0.1
    %)
    
    
    1.7
    %
 61




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  December 31,2010
    
    
    2009
    
    
    2008Allowance for doubtful accounts
    
    $
    87
    
    
    $
    75
    
    
    $
    92Accrued expenses and other reserves
    
    
    2,146
    
    
    
    1,936
    
    
    
    1,905Tax credits, deferred R&D, and other
    
    
    899
    
    
    
    633
    
    
    
    833Net operating loss
    
    
    22,088
    
    
    
    19,576
    
    
    
    15,807Valuation allowance
    
    
    (25,206
    )
    
    
    (22,209
    )
    
    
    (18,622
    )Total deferred tax asset
    
    
    14
    
    
    
    11
    
    
    
    15Deferred tax liabilities associated
with indefinite-lived intangibles
    
    
    
    
    
    
    
    
    
    
    Net total deferred taxes
    
    $
    14
    
    
    $
    11
    
    
    $
    15
   62




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 14. Segments and Geographic Information
   Years ended December 31,2010
    
    
    2009
    
    
    2008Solutions:Net sales
    
    $
    19,763
    
    
    $
    
    
    
    $
    Cost of sales
    
    
    16,332
    
    
    
    
    
    
    
    Gross profit
    
    
    3,431
    
    
    
    
    
    
    
    Operating expenses:Sales and marketing
    
    
    1,407
    
    
    
    
    
    
    
    General and administrative
    
    
    1,377
    
    
    
    
    
    
    
    Total operating expenses
    
    
    2,784
    
    
    
    
    
    
    
    Segment income
    
    $
    647
    
    
    $
    
    
    
    $
    Products:Net sales
    
    $
    15,366
    
    
    $
    12,489
    
    
    $
    20,032Cost of sales
    
    
    12,394
    
    
    
    10,449
    
    
    
    15,926Gross profit
    
    
    2,972
    
    
    
    2,040
    
    
    
    4,106Operating expenses:Research and development
    
    
    (202
    )
    
    
    319
    
    
    
    237Sales and marketing
    
    
    4,796
    
    
    
    5,843
    
    
    
    8,032General and administrative
    
    
    293
    
    
    
    546
    
    
    
    473Restructuring
    
    
    26
    
    
    
    125
    
    
    
    Loss on impairment
    
    
    156
    
    
    
    
    
    
    
    3,195Total operating expenses
    
    
    5,069
    
    
    
    6,833
    
    
    
    11,937Segment loss
    
    $
    (2,097
    )
    
    $
    (4,793
    )
    
    $
    (7,831
    )Reconciliation of segment income (loss) to net loss:Segment income (loss):Solutions
    
    $
    647
    
    
    $
    
    
    
    $
    Products
    
    
    (2,097
    )
    
    
    (4,793
    )
    
    
    (7,831
    )Total segment loss
    
    
    (1,450
    )
    
    
    (4,793
    )
    
    
    (7,831
    )Operating expenses:Sales and marketing
    
    
    212
    
    
    
    201
    
    
    
    49General and administrative
    
    
    4,445
    
    
    
    4,787
    
    
    
    4,970Valuation of equity instruments
    
    
    1,812
    
    
    
    
    
    
    
    Total operating expenses
    
    
    6,469
    
    
    
    4,988
    
    
    
    5,019Other expense
    
    
    (592
    )
    
    
    (26
    )
    
    
    (73
    )Net loss from continuing operations before income taxes
    
    
    (8,511
    )
    
    
    (9,807
    )
    
    
    (12,923
    )(Provision for) benefit from income taxes
    
    
    (6
    )
    
    
    (7
    )
    
    
    250Net loss from continuing operations
    
    
    (8,517
    )
    
    
    (9,814
    )
    
    
    (12,673
    )Loss from discontinued operations
    
    
    
    
    
    
    (1,201
    )
    
    
    (1,775
    )Net loss
    
    $
    (8,517
    )
    
    $
    (11,015
    )
    
    $
    (14,448
    )
 63




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
  Years ended December 31,2010
    
    
    2009
    
    
    2008Products segment net sales:Pool and commercial products
    
    $
    12,265
    
    
    $
    11,561
    
    
    $
    18,362Government products/R&D services
    
    
    3,101
    
    
    
    928
    
    
    
    1,670Total products segment net sales
    
    
    15,366
    
    
    
    12,489
    
    
    
    20,032Products segment cost of sales:Pool and commercial products
    
    
    7,988
    
    
    
    7,248
    
    
    
    11,739Government products/R&D services
    
    
    3,104
    
    
    
    838
    
    
    
    643Unallocated manufacturing overhead
    
    
    1,302
    
    
    
    2,363
    
    
    
    3,544Total products segment cost of sales
    
    
    12,394
    
    
    
    10,449
    
    
    
    15,926Products segment gross profit:Pool and commercial products
    
    
    4,277
    
    
    
    4,313
    
    
    
    6,623Government products/R&D services
    
    
    (3
    )
    
    
    90
    
    
    
    1,027Unallocated manufacturing overhead
    
    
    (1,302
    )
    
    
    (2,363
    )
    
    
    (3,544
    )Total products segment gross profit
    
    $
    2,972
    
    
    $
    2,040
    
    
    $
    4,106
  1)
    
    costs associated with the operation and shut down of the Solon manufacturing facility
which has been relocated to the Mexico facility; and2)
    
    specific expenses which are not attributable to a specific business unit but rather are
calculated on the total products business segment. Expenses include Solon manufacturing
facility rent, Solon manufacturing depreciation, inventory reserves and accruals and Solon
manufacturing support payroll and severance.
  Years ended December 31,2010
    
    
    2009
    
    
    2008United States Domestic
    
    $
    31,314
    
    
    $
    7,930
    
    
    $
    12,902International
    
    
    3,815
    
    
    
    4,559
    
    
    
    7,130Net sales
    
    $
    35,129
    
    
    $
    12,489
    
    
    $
    20,032
  December 31,2010
    
    
    2009United States
    
    $
    4,676
    
    
    $
    6,306International
    
    
    119
    
    
    
    207Long-lived assets, net
    
    $
    4,795
    
    
    $
    6,513
 64




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 15. Employee Retirement Plan
  16. Restructuring
  17. Related Party Transactions
 Compensation  Stock Compensation,
     65




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##### Table of Contents



ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
         66




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ENERGY FOCUS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2010, 2009, and 2008
 18. Legal Matters
  19. Subsequent Events
  Supplementary Financial Information to Item 8
   QUARTERLY FINANCIAL DATA (UNAUDITED)
( amounts in thousands, except per share amounts )
 2010 Quarters Ended
    
    Dec. 31
    
    
    Sep. 30
    
    
    Jun. 30
    
    
    Mar. 31Net sales from continuing operations
    
    $
    8,765
    
    
    $
    9,049
    
    
    $
    8,958
    
    
    $
    8,357Net loss from continuing operations
    
    
    (1,572
    )
    
    
    (1,563
    )
    
    
    (1,812
    )
    
    
    (3,570
    )Net income/(loss) from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss per share:Basic
    
    $
    (0.06
    )
    
    $
    (0.06
    )
    
    $
    (0.08
    )
    
    $
    (0.17
    )Diluted
    
    $
    (0.06
    )
    
    $
    (0.06
    )
    
    $
    (0.08
    )
    
    $
    (0.17
    )
 2009 Quarters Ended
    
    Dec. 31
    
    
    Sep. 30
    
    
    Jun. 30
    
    
    Mar. 31Net sales from continuing operations
    
    $
    3,618
    
    
    $
    3,023
    
    
    $
    3,325
    
    
    $
    2,523Net loss from continuing operations
    
    
    (2,406
    )
    
    
    (2,687
    )
    
    
    (1,982
    )
    
    
    (2,739
    )Net (loss)/income from discontinued
operations
    
    
    (602
    )
    
    
    69
    
    
    
    (366
    )
    
    
    (302
    )Net loss per share:Basic
    
    $
    (0.17
    )
    
    $
    (0.17
    )
    
    $
    (0.16
    )
    
    $
    (0.20
    )Diluted
    
    $
    (0.17
    )
    
    $
    (0.17
    )
    
    $
    (0.16
    )
    
    $
    (0.20
    )
 67




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##### Table of Contents



Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
   (b) Changes in Internal Control over Financial Reporting
  Managements Report on Internal Controls over Financial Reporting
    68




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##### Table of Contents



Attestation Report of Independent Registered Public Accounting Firm
  
 Item 9B. Other Information
  69




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PART III
 
 Item 10. Directors, Executive Officers, and Corporate Governance
 Directors
   Executive Officers
  Section 16(a) Beneficial Ownership Reporting Compliance
  Audit Committee
  Code of Ethics
 www.efoi.com
  
 Item 11. Executive Compensation
  
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
 
 
 
 Item 13. Certain Relationships and Related Transactions and Director Independence
   
 70




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##### Table of Contents



Item 14. Principal Accountant Fees and Services
    
 71




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PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a) (1) Financial Statements
  (2)
    
    Financial Statement Schedules
  SCHEDULE II
ENERGY FOCUS, INC.
SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
 (amounts in thousands)
 Balance at
    
    
    Charges to
    
    
    
    
    
    
    BalanceBeginning
    
    
    Revenue/
    
    
    
    
    
    
    at EndDescription
    
    of Year
    
    
    Expenses
    
    
    Deductions
    
    
    of YearYear ended December 31, 2010Allowance for doubtful
accounts and returns
    
    $
    395
    
    
    $
    291
    
    
    $
    240
    
    
    $
    446Valuation allowance for
deferred tax assets
    
    
    22,209
    
    
    
    2,997
    
    
    
    
    
    
    
    25,206Year ended December 31, 2009Allowance for doubtful
accounts and returns
    
    
    486
    
    
    
    73
    
    
    
    164
    
    
    
    395Valuation allowance for
deferred tax assets
    
    
    18,622
    
    
    
    3,587
    
    
    
    
    
    
    
    22,209Year ended December 31, 2008Allowance for doubtful
accounts and returns
    
    
    848
    
    
    
    245
    
    
    
    607
    
    
    
    486Valuation allowance for
deferred tax assets
    
    
    14,054
    
    
    
    4,568
    
    
    
    
    
    
    
    18,622
 72




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##### Table of Contents



(3)
    
    Exhibits
 ExhibitNumber
    
    Description of Documents2.1
    
    Agreement and Plan of Merger between Fiberstars, Inc., a California corporation, and Fiberstars, Inc.,
a Delaware corporation (incorporated by reference to Appendix C to the Registrants Definitive Proxy
Statement filed on May 1, 2006).3.1
    
    Certificate of Incorporation of the Registrant (incorporated by reference to Appendix A to the
Registrants Definitive Proxy Statement filed on May 1, 2006).3.2
    
    Certificate of Designation of Series A Participating Preferred Stock of the Registrant (incorporated by
reference to Exhibit 3.2 to the Registrants Current Report on Form 8-K filed on November 27, 2006).3.3
    
    Bylaws of the Registrant (incorporated by reference to Appendix C to the Registrants Current Report on
Form 8-K filed on November 27, 2006).3.4
    
    Certificate of Ownership and Merger, Merging Energy Focus, Inc., a Delaware corporation, into
Fiberstars, Inc., a Delaware corporation (incorporated by reference to Exhibit 3.1 to the Registrants
Quarterly Report on Form 10-Q filed on May 10, 2007).4.1
    
    Form of Warrant for the purchase of shares of common stock (incorporated by reference to Exhibit 99.3
to the Registrants Current Report on Form 8-K filed on June 19, 2003).4.2
    
    Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrants Current
Report on Form 8-K filed on November 27, 2006)4.3
    
    Rights Agreement dated as of October 25, 2006 between the Registrant and Mellon Investor Services, LLC,
as rights agent (incorporated by reference to Exhibit 4.2 to the Registrants Current Report on Form
8-K filed on November 27, 2006).4.4
    
    Form of Warrant for the purchase of shares of common stock (incorporated by reference to Exhibit 4.2 to
the Registrants Current Report on Form 8-K filed on November 27, 2006).4.5
    
    Form of Warrant for the purchase of shares of common stock (incorporated by reference to Exhibit 1.2 to
the Registrants Current Report on Form 8-K filed on March 19, 2008).4.6
    
    Amendment No. 1 to Rights Agreement between the Registrant and Mellon Investment Services, LLC, as
Rights Agent, dated as of March 12, 2008 (incorporated by reference to Exhibit 3.1 to the Registrants
Current Report on Form 8-K filed on March 19, 2009).4.7
    
    Amendment No. 2 to the Rights Agreement between the Registrant and Mellon Investment Services, LLC, as
Rights Agent, dated as of December 31, 2009 (incorporated by reference to Exhibit 3.1 to the
Registrants Current Report on Form 8-K filed on March 3, 2010).4.8
    
    Common Stock Purchase Warrant No. 2009SRCW-01 for the purchase of 600,000 shares of common stock dated
December 31, 2009 in the name of Woodstone Energy, LLC (incorporated by reference to Exhibit 4.8 to the
Registrants Annual Report on Form 10-K filed on March 31, 2010).4.9
    
    Form of Common Stock Purchase Warrant for the purchase of shares of common stock dated as of December
29, 2009 (incorporated by reference to Exhibit 4.9 to the Registrants Annual Report on Form 10-K filed
on March 31, 2010).4.10
    
    Form of Common Stock Purchase Warrant No. 2010LPCW-01 for the purchase of 350,000 shares of common
stock (incorporated by reference to Exhibit 10.3 to the Registrants Current Report on Form 8-K filed
on March 19, 2010).4.11
    
    Form of Common Stock Purchase Warrant for the purchase of shares of common stock dated as of March 30,
2010 (incorporated by reference to Exhibit 4.11 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.1
    
    1994 Employee Stock Purchase Plan, amended as of December 7, 2000 (incorporated by reference to Exhibit
99.3 to the Registrants Registration Statement on Form S-8 (Commission File No. 333-52042) filed on
December 18, 2000).10.2
    
    Form of Agreement between the Registrant and independent sales representatives (incorporated by
reference to Exhibit 10.20 to the Registrants Registration Statement on Form SB-2 (Commission File No.
33-79116-LA)).10.3*
    
    Distribution Agreement dated March 21, 1995 between the Registrant and Mitsubishi International
Corporation (incorporated by reference to Exhibit 10.18 to the Registrants Annual Report on Form
10-KSB for the year ended December 31, 1994).10.4*
    
    Three -Year Supply Agreement dated November 30, 2000 between the Registrant and Mitsubishi
International Corporation (incorporated by reference to Exhibit 10.30 to the Registrants Annual Report
on Form 10-K405 filed on April 2, 2001).10.5
    
    Securities Purchase Agreement dated June 17, 2003 among the Registrant and the investors named therein
(incorporated by reference to Exhibit 99.2 to the Registrants Current Report on Form 8-K filed on June
19, 2003).10.6
    
    Form of Indemnification Agreement for officers of the Registrant (incorporated by reference to Exhibit
10.42 to the Registrants Annual Report on Form 10-K filed on March 30, 2004).10.7
    
    Form of Indemnification Agreement for directors of the Registrant (incorporated by reference to Exhibit
10.44 to the Registrants Annual Report on Form 10-K filed on March 30, 2004).10.8
    
    Production Share Agreement dated October 9, 2003 among the Registrant, North American Production
Sharing, Inc., and Industrias Unidas de B.C., S.A. de C.V. (incorporated by reference to Exhibit 10.45
to the Registrants Annual Report on Form 10-K filed on March 30, 2004).
 73




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ExhibitNumber
    
    Description of Documents10.9
    
    Consulting Agreement effective as of December 15, 2004 between the Registrant and Gensler Architecture,
Design, and Planning, P.C. (incorporated by reference to Exhibit 10.28 to the Registrants Annual
Report on Form 10-K filed on March 31, 2006).10.10
    
    Consulting Agreement effective as of December 15, 2004 between the Registrant and Jeffrey H. Brite
(incorporated by reference to Exhibit 10.29 to the Registrants Annual Report on Form 10-K filed on
March 31, 2006).10.11
    
    Loan and Security Agreement between Silicon Valley Bank and the Registrant dated August 15, 2005
(incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on
August 18, 2005).10.12
    
    Employment Agreement between the Registrant and John M. Davenport dated July 1, 2005 (incorporated by
reference from Exhibit 10.2 to the Registrants Quarterly Report on Form 10-Q filed on November 14,
2005).10.13
    
    Severance Agreement between the Registrant and David N. Ruckert dated September 16, 2005 (incorporated
by reference to Exhibit 10.3 to the Registrants Quarterly Report on Form 10-Q filed on November 14,
2005).10.14*
    
    Fiberstars Development Agreement between the Registrant and Advanced Lighting Technologies, Inc. dated
September 19, 2005 (incorporated by reference to Exhibit 10.4 to the Registrants Quarterly Report on
Form 10-Q filed on November 14, 2005)10.15*
    
    ADLT Development Agreement between the Registrant and Advanced Lighting Technologies, Inc. dated
September 19, 2005 (incorporated by reference to Exhibit 10.5 to the Registrants Quarterly Report on
Form 10-Q filed on November 14, 2005).10.16*
    
    Equipment Purchase and Supply Agreement between the Registrant and Deposition Sciences, Inc. dated
September 19, 2005 (incorporated by reference to Exhibit 10.6 to the Registrants Quarterly Report on
Form 10-Q filed on November 14, 2005).10.17
    
    Cross-License Agreement between the Registrant and Advanced Lighting Technologies, Inc. dated September
19, 2005 (incorporated by reference to Exhibit 10.7 to the Registrants Quarterly Report on Form 10-Q
filed on November 14, 2005).10.18
    
    Master Services Agreement between the Registrant and Advanced Lighting Technologies, Inc. dated
September 19, 2005 (incorporated by reference to Exhibit 10.8 to the Registrants Quarterly Report on
Form 10-Qfiled on November 14, 2005).10.19
    
    First Amendment to Production Share Agreement, effective as of August 17, 2005, among the Registrant,
North American Production Sharing, Inc., and Industrias Unidas de B.C., S.A. de C.V. (incorporated by
reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on October 25, 2005).10.20
    
    Sublease between Venture Lighting International, Inc. and the Registrant dated as of November 11, 2005
(incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on
November 17, 2005).10.21
    
    Amended and Restated Loan and Security Agreement between the Registrant and Silicon Valley Bank dated
December 30, 2005 (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form
8-K filed on January 6, 2006).10.22
    
    Consulting Agreement between the Registrant and David N. Ruckert dated as of February 3, 2006
(incorporated by reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q filed on
May 15, 2006).10.23*
    
    Equipment Purchase and Product Supply Agreement entered into as of May 25, 2006 between the Registrant
and Deposition Sciences, Inc. (incorporated by reference to Exhibit 10.1 to Amendment No. 2 to the
Registrants Quarterly Report on Form 10-Q filed on March 6, 2009).10.24
    
    Modification to Sublease between the Registrant and Keystone Ruby, LLC. (incorporated by reference to
Exhibit 10.2 to the Registrants Quarterly Report on Form 10-Q filed on August 11, 2006).10.25
    
    Amendment No. 1 to Amended and Restated Loan and Security Agreement between the Registrant and Silicon
Valley Bank dated September 25, 2006 (incorporated by reference from Exhibit 10.1 to the Registrants
Quarterly Report on Form 10-Q filed on November 14, 2006).10.26
    
    First Amendment to Consulting Agreement between the Registrant and David N. Ruckert dated as of
February 3, 2007 (incorporated by reference to Exhibit 10.32 to the Registrants Annual Report on Form
10-K filed on March 16, 2007).10.27
    
    Form of Indemnification Agreement for directors and officers of the Registrant (incorporated by
reference to Exhibit 10.31 of the Registrants Annual Report on Form 10-K filed on March 16, 2007).10.28
    
    Amendment No. 4 to Amended and Restated Loan and Security Agreement between Silicon Valley Bank and the
Registrant dated as of October 1, 2007 (incorporated by reference to Exhibit 10.39 to the Registrants
Annual Report on Form 10-K filed on March 17, 2008).10.29
    
    Amendment No. 5 to Amended and Restated Loan and Security Agreement between Silicon Valley Bank and
Registrant dated as of January 29, 2008 (incorporated by reference to Exhibit 10.39 to the Registrants
Annual Report on Form 10-K filed on March 17, 2008).10.30
    
    Management Agreement between Barry R. Greenwald and the Registrant dated as of October 19, 2007
(incorporated by reference to Exhibit 10.39 to the Registrants Annual Report on Form 10-K filed on
March 17, 2008).10.31
    
    Form of Securities Purchase Agreement dated as of March 14, 2008 (incorporated by reference to Exhibit
1.1 to the Registrants Current Report on Form 8-K filed on March 19, 2008).10.32
    
    Second Amended and Restated Loan and Security Agreement between the Registrant and Silicon Valley Bank
dated as of October 15, 2008 (incorporated by reference to Exhibit 10.2 to the Registrants Quarterly
Report on Form 10-Q filed on November 7, 2008).
 74




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##### Table of Contents



ExhibitNumber
    
    Description of Documents10.33
    
    1994 Stock Option Plan, amended as of May 24, 2000 (incorporated by reference to Exhibit 99.1 to the
Registrants Registration Statement on Form S-8 (Commission File No. 333-52042) filed on December 18,
2000).10.34
    
    1994 Directors Stock Option Plan, amended as of May 12, 1999 (incorporated by reference to Exhibit
99.2 to the Registrants Registration Statement on Form S-8 (Commission File No. 333-52042) filed on
December 18, 2000).10.35
    
    2004 Stock Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registrants Registration
Statement on Form S-8 (Commission File No. 333-122-686) filed on February 10, 2005).10.36
    
    2008 Incentive Stock Plan (incorporated by reference to Appendix D to the Registrants Definitive Proxy
Statement filed on August 8, 2008).10.37
    
    Fourth Loan Modification and Forbearance Agreement to Second Amended and Restated Loan and Security
Agreement between Registrant and Silicon Valley Bank dated as of August 25, 2009 (incorporated by
reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q filed on November 13,
2009).10.38
    
    Fifth Loan Modification and Forbearance Agreement to Second Amended and Restated Loan and Security
Agreement between Registrant and Silicon Valley Bank dated as of September 13, 2009 (incorporated by
reference to Exhibit 10.2 to the Registrants Quarterly Report on Form 10-Q filed on November 13,
2009).10.39
    
    Sixth Loan Modification and Forbearance Agreement to Second Amended and Restated Loan and Security
Agreement between Registrant and Silicon Valley Bank dated as of October 5, 2009 (incorporated by
reference to Exhibit 10.3 to the Registrants Quarterly Report on Form 10-Q filed on November 13,
2009).10.40
    
    Member Interest Purchase Agreement among the Registrant and TLC Investments, LLC, Jamie Hall, and
Robert E. Wilson dated December 31, 2009 (incorporated by reference to Exhibit 10.40 to the
Registrants Annual Report on Form 10-K filed on March 31, 2010).10.41
    
    Convertible Promissory Note from the Registrant to TLC Investments, LLC, Jamie Hall, and Robert E.
Wilson dated December 31, 2009 (incorporated by reference to Exhibit 10.41 to the Registrants Annual
Report on Form 10-K filed on March 31, 2010).10.42
    
    Warrant Acquisition Agreement between the Registrant and Woodstone Engery, LLC dated December 31, 2009
(incorporated by reference to Exhibit 10.42 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.43
    
    Form of Bonding Support Agreement dated as of December 29, 2009 (incorporated by reference to Exhibit
10.43 to the Registrants Annual Report on Form 10-K filed on March 31, 2010).10.44
    
    Form of Warrant Acquisition Agreement for bonding support dated as of December 29, 2009 (incorporated
by reference to Exhibit 10.44 to the Registrants Annual Report on Form 10-K filed on March 31, 2010).10.45
    
    Form of Agreement of Confidentiality and Non-Competition for employees including officers (incorporated
by reference to Exhibit 10.45 to the Registrants Annual Report on Form 10-K filed on March 31, 2010).10.46
    
    Purchase Agreement between the Registrant and Lincoln Park Capital Fund, LLC dated March 17, 2010
(incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on
March 19, 2010).10.47
    
    Registration Rights Agreement between the Registrant and Lincoln Park Capital Fund, LLC dated March 17,
2010 (incorporated by reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K filed on
March 19, 2010).10.48
    
    Note Purchase Agreement between the Registrant and EF Energy Partners LLC dated March 30, 2010
(incorporated by reference to Exhibit 10.48 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.49
    
    Secured Subordinated Promissory Note from the Registrant to EF Energy Partners LLC dated March 30, 2010
(incorporated by reference to Exhibit 10.49 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.50
    
    Warrant Acquisition Agreement among the Registrant and the investors named therein dated March 30, 2010
(incorporated by reference to Exhibit 10.50 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.51
    
    Form of Management Continuity Agreement for Executive Officers (incorporated by reference to Exhibit
10.1 to the Registrants Quarterly Report on Form 10-Q filed on May 13, 2010).10.52
    
    2008 Incentive Stock Plan (as amended November 19, 2008 and February 25, 2010) (incorporated by
reference to Exhibit 99.1 to the Registrants Registration Statement on Form S-8 filed on September 8,
2010).10.53
    
    Form of Notice of Stock Option Grant for 2008 Stock Incentive Plan (incorporated by reference to
Exhibit 99.2 to the Registrants Registration Statement on Form S-8 filed on September 8, 2010).21.1
    
    Subsidiaries of the Registrant (filed with this Report).23.1
    
    Consent of Plante & Moran, PLLC, Independent Registered Public Accounting Firm (filed with this Report).23.2
    
    Consent of Grant Thornton, LLP, Independent Registered Public Accounting Firm (filed with this Report).24.1
    
    Power of Attorney (filed with this Report).31.1
    
    Rule 13a-14(a) Certification by Chief Executive Officer (filed with this Report).31.2
    
    Rule 13a-14(a) Certification by Chief Financial Officer (filed with this Report).32.1
    
    Section 1350 Certification of Chief Executive Officer (filed with this Report).32.2
    
    Section 1350 Certification of Chief Financial Officer (filed with this Report).
 
 *
    
    Confidential treatment has been granted with respect to certain portions of this agreement.
    
    Management contract or compensatory plan or arrangement. 75




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SIGNATURES
  ENERGY FOCUS, INC.
     
   
(Registrant)By:
    /s/ JOSEPH G. KAVESKIJoseph G. Kaveski

Chief Executive Officer

Date: March 31, 2011  Signature
    
    Title/s/ JOSEPH G. KAVESKI
    
    Chief Executive Officer and DirectorJoseph G. Kaveski
    
    (Principal Executive Officer)/s/ JOHN M. DAVENPORT
    
    President and DirectorJohn M. Davenport/s/ FRANK LAMANNA
    
    interim Chief Accounting OfficerFrank Lamanna
    
    (principal accounting officer)*/s/ R. LOUIS SCHNEEBERGER
    
    DirectorR. Louis Schneeberger*/s/ J. JAMES FINNERTY
    
    DirectorJ. James Finnerty*/s/ MICHAEL A. KASPER
    
    DirectorMichael A. Kasper*/s/ PAUL VON PAUMGARTTEN
    
    Lead DirectorPaul von Paumgartten*/s/ DAVID ANTHONY
    
    DirectorDavid Anthony
 
 *
    
    The undersigned, by signing his name, signs this Report on March 31, 2011 on behalf of the above
officers and directors pursuant to a Power of Attorney executed by them and filed as an exhibit
to this Report.    76




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EXHIBIT INDEX
 Exhibit Number
    
    Description of Documents2.1
    
    Agreement and Plan of Merger between Fiberstars, Inc., a California corporation, and Fiberstars, Inc.,
a Delaware corporation (incorporated by reference to Appendix C to the Registrants Definitive Proxy
Statement filed on May 1, 2006).3.1
    
    Certificate of Incorporation of the Registrant (incorporated by reference to Appendix A to the
Registrants Definitive Proxy Statement filed on May 1, 2006).3.2
    
    Certificate of Designation of Series A Participating Preferred Stock of the Registrant (incorporated by
reference to Exhibit 3.2 to the Registrants Current Report on Form 8-K filed on November 27, 2006).3.3
    
    Bylaws of the Registrant (incorporated by reference to Appendix C to the Registrants Current Report on
Form 8-K filed on November 27, 2006).3.4
    
    Certificate of Ownership and Merger, Merging Energy Focus, Inc., a Delaware corporation, into
Fiberstars, Inc., a Delaware corporation (incorporated by reference to Exhibit 3.1 to the Registrants
Quarterly Report on Form 10-Q filed on May 10, 2007).4.1
    
    Form of Warrant for the purchase of shares of common stock (incorporated by reference to Exhibit 99.3
to the Registrants Current Report on Form 8-K filed on June 19, 2003).4.2
    
    Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrants Current
Report on Form 8-K filed on November 27, 2006)4.3
    
    Rights Agreement dated as of October 25, 2006 between the Registrant and Mellon Investor Services, LLC,
as rights agent (incorporated by reference to Exhibit 4.2 to the Registrants Current Report on Form
8-K filed on November 27, 2006).4.4
    
    Form of Warrant for the purchase of shares of common stock (incorporated by reference to Exhibit 4.2 to
the Registrants Current Report on Form 8-K filed on November 27, 2006).4.5
    
    Form of Warrant for the purchase of shares of common stock (incorporated by reference to Exhibit 1.2 to
the Registrants Current Report on Form 8-K filed on March 19, 2008).4.6
    
    Amendment No. 1 to Rights Agreement between the Registrant and Mellon Investment Services, LLC, as
Rights Agent, dated as of March 12, 2008 (incorporated by reference to Exhibit 3.1 to the Registrants
Current Report on Form 8-K filed on March 19, 2009).4.7
    
    Amendment No. 2 to the Rights Agreement between the Registrant and Mellon Investment Services, LLC, as
Rights Agent, dated as of December 31, 2009 (incorporated by reference to Exhibit 3.1 to the
Registrants Current Report on Form 8-K filed on March 3, 2010).4.8
    
    Common Stock Purchase Warrant No. 2009SRCW-01 for the purchase of 600,000 shares of common stock dated
December 31, 2009 in the name of Woodstone Energy, LLC (incorporated by reference to Exhibit 4.8 to the
Registrants Annual Report on Form 10-K filed on March 31, 2010).4.9
    
    Form of Common Stock Purchase Warrant for the purchase of shares of common stock dated as of December
29, 2009 (incorporated by reference to Exhibit 4.9 to the Registrants Annual Report on Form 10-K filed
on March 31, 2010).4.10
    
    Form of Common Stock Purchase Warrant No. 2010LPCW-01 for the purchase of 350,000 shares of common
stock (incorporated by reference to Exhibit 10.3 to the Registrants Current Report on Form 8-K filed
on March 19, 2010).4.11
    
    Form of Common Stock Purchase Warrant for the purchase of shares of common stock dated as of March 30,
2010 (incorporated by reference to Exhibit 4.11 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.1
    
    1994 Employee Stock Purchase Plan, amended as of December 7, 2000 (incorporated by reference to Exhibit
99.3 to the Registrants Registration Statement on Form S-8 (Commission File No. 333-52042) filed on
December 18, 2000).10.2
    
    Form of Agreement between the Registrant and independent sales representatives (incorporated by
reference to Exhibit 10.20 to the Registrants Registration Statement on Form SB-2 (Commission File No.
33-79116-LA)).10.3*
    
    Distribution Agreement dated March 21, 1995 between the Registrant and Mitsubishi International
Corporation (incorporated by reference to Exhibit 10.18 to the Registrants Annual Report on Form
10-KSB for the year ended December 31, 1994).10.4*
    
    Three -Year Supply Agreement dated November 30, 2000 between the Registrant and Mitsubishi
International Corporation (incorporated by reference to Exhibit 10.30 to the Registrants Annual Report
on Form 10-K405 filed on April 2, 2001).10.5
    
    Securities Purchase Agreement dated June 17, 2003 among the Registrant and the investors named therein
(incorporated by reference to Exhibit 99.2 to the Registrants Current Report on Form 8-K filed on June
19, 2003).10.6
    
    Form of Indemnification Agreement for officers of the Registrant (incorporated by reference to Exhibit
10.42 to the Registrants Annual Report on Form 10-K filed on March 30, 2004).10.7
    
    Form of Indemnification Agreement for directors of the Registrant (incorporated by reference to Exhibit
10.44 to the Registrants Annual Report on Form 10-K filed on March 30, 2004).10.8
    
    Production Share Agreement dated October 9, 2003 among the Registrant, North American Production
Sharing, Inc., and Industrias Unidas de B.C., S.A. de C.V. (incorporated by reference to Exhibit 10.45
to the Registrants Annual Report on Form 10-K filed on March 30, 2004).
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##### Table of Contents



Exhibit Number
    
    Description of Documents10.9
    
    Consulting Agreement effective as of December 15, 2004 between the Registrant and Gensler Architecture,
Design, and Planning, P.C. (incorporated by reference to Exhibit 10.28 to the Registrants Annual
Report on Form 10-K filed on March 31, 2006).10.10
    
    Consulting Agreement effective as of December 15, 2004 between the Registrant and Jeffrey H. Brite
(incorporated by reference to Exhibit 10.29 to the Registrants Annual Report on Form 10-K filed on
March 31, 2006).10.11
    
    Loan and Security Agreement between Silicon Valley Bank and the Registrant dated August 15, 2005
(incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on
August 18, 2005).10.12
    
    Employment Agreement between the Registrant and John M. Davenport dated July 1, 2005 (incorporated by
reference from Exhibit 10.2 to the Registrants Quarterly Report on Form 10-Q filed on November 14,
2005).10.13
    
    Severance Agreement between the Registrant and David N. Ruckert dated September 16, 2005 (incorporated
by reference to Exhibit 10.3 to the Registrants Quarterly Report on Form 10-Q filed on November 14,
2005).10.14*
    
    Fiberstars Development Agreement between the Registrant and Advanced Lighting Technologies, Inc. dated
September 19, 2005 (incorporated by reference to Exhibit 10.4 to the Registrants Quarterly Report on
Form 10-Q filed on November 14, 2005)10.15*
    
    ADLT Development Agreement between the Registrant and Advanced Lighting Technologies, Inc. dated
September 19, 2005 (incorporated by reference to Exhibit 10.5 to the Registrants Quarterly Report on
Form 10-Q filed on November 14, 2005).10.16*
    
    Equipment Purchase and Supply Agreement between the Registrant and Deposition Sciences, Inc. dated
September 19, 2005 (incorporated by reference to Exhibit 10.6 to the Registrants Quarterly Report on
Form 10-Q filed on November 14, 2005).10.17
    
    Cross-License Agreement between the Registrant and Advanced Lighting Technologies, Inc. dated September
19, 2005 (incorporated by reference to Exhibit 10.7 to the Registrants Quarterly Report on Form 10-Q
filed on November 14, 2005).10.18
    
    Master Services Agreement between the Registrant and Advanced Lighting Technologies, Inc. dated
September 19, 2005 (incorporated by reference to Exhibit 10.8 to the Registrants Quarterly Report on
Form 10-Qfiled on November 14, 2005).10.19
    
    First Amendment to Production Share Agreement, effective as of August 17, 2005, among the Registrant,
North American Production Sharing, Inc., and Industrias Unidas de B.C., S.A. de C.V. (incorporated by
reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on October 25, 2005).10.20
    
    Sublease between Venture Lighting International, Inc. and the Registrant dated as of November 11, 2005
(incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on
November 17, 2005).10.21
    
    Amended and Restated Loan and Security Agreement between the Registrant and Silicon Valley Bank dated
December 30, 2005 (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form
8-K filed on January 6, 2006).10.22
    
    Consulting Agreement between the Registrant and David N. Ruckert dated as of February 3, 2006
(incorporated by reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q filed on
May 15, 2006).10.23*
    
    Equipment Purchase and Product Supply Agreement entered into as of May 25, 2006 between the Registrant
and Deposition Sciences, Inc. (incorporated by reference to Exhibit 10.1 to Amendment No. 2 to the
Registrants Quarterly Report on Form 10-Q filed on March 6, 2009).10.24
    
    Modification to Sublease between the Registrant and Keystone Ruby, LLC. (incorporated by reference to
Exhibit 10.2 to the Registrants Quarterly Report on Form 10-Q filed on August 11, 2006).10.25
    
    Amendment No. 1 to Amended and Restated Loan and Security Agreement between the Registrant and Silicon
Valley Bank dated September 25, 2006 (incorporated by reference from Exhibit 10.1 to the Registrants
Quarterly Report on Form 10-Q filed on November 14, 2006).10.26
    
    First Amendment to Consulting Agreement between the Registrant and David N. Ruckert dated as of
February 3, 2007 (incorporated by reference to Exhibit 10.32 to the Registrants Annual Report on Form
10-K filed on March 16, 2007).10.27
    
    Form of Indemnification Agreement for directors and officers of the Registrant (incorporated by
reference to Exhibit 10.31 of the Registrants Annual Report on Form 10-K filed on March 16, 2007).10.28
    
    Amendment No. 4 to Amended and Restated Loan and Security Agreement between Silicon Valley Bank and the
Registrant dated as of October 1, 2007 (incorporated by reference to Exhibit 10.39 to the Registrants
Annual Report on Form 10-K filed on March 17, 2008).10.29
    
    Amendment No. 5 to Amended and Restated Loan and Security Agreement between Silicon Valley Bank and
Registrant dated as of January 29, 2008 (incorporated by reference to Exhibit 10.39 to the Registrants
Annual Report on Form 10-K filed on March 17, 2008).10.30
    
    Management Agreement between Barry R. Greenwald and the Registrant dated as of October 19, 2007
(incorporated by reference to Exhibit 10.39 to the Registrants Annual Report on Form 10-K filed on
March 17, 2008).10.31
    
    Form of Securities Purchase Agreement dated as of March 14, 2008 (incorporated by reference to Exhibit
1.1 to the Registrants Current Report on Form 8-K filed on March 19, 2008).10.32
    
    Second Amended and Restated Loan and Security Agreement between the Registrant and Silicon Valley Bank
dated as of October 15, 2008 (incorporated by reference to Exhibit 10.2 to the Registrants Quarterly
Report on Form 10-Q filed on November 7, 2008).
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##### Table of Contents



Exhibit Number
    
    Description of Documents10.33
    
    1994 Stock Option Plan, amended as of May 24, 2000 (incorporated by reference to Exhibit 99.1 to the
Registrants Registration Statement on Form S-8 (Commission File No. 333-52042) filed on December 18,
2000).10.34
    
    1994 Directors Stock Option Plan, amended as of May 12, 1999 (incorporated by reference to Exhibit
99.2 to the Registrants Registration Statement on Form S-8 (Commission File No. 333-52042) filed on
December 18, 2000).10.35
    
    2004 Stock Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registrants Registration
Statement on Form S-8 (Commission File No. 333-122-686) filed on February 10, 2005).10.36
    
    2008 Incentive Stock Plan (incorporated by reference to Appendix D to the Registrants Definitive Proxy
Statement filed on August 8, 2008).10.37
    
    Fourth Loan Modification and Forbearance Agreement to Second Amended and Restated Loan and Security
Agreement between Registrant and Silicon Valley Bank dated as of August 25, 2009 (incorporated by
reference to Exhibit 10.1 to the Registrants Quarterly Report on Form 10-Q filed on November 13,
2009).10.38
    
    Fifth Loan Modification and Forbearance Agreement to Second Amended and Restated Loan and Security
Agreement between Registrant and Silicon Valley Bank dated as of September 13, 2009 (incorporated by
reference to Exhibit 10.2 to the Registrants Quarterly Report on Form 10-Q filed on November 13,
2009).10.39
    
    Sixth Loan Modification and Forbearance Agreement to Second Amended and Restated Loan and Security
Agreement between Registrant and Silicon Valley Bank dated as of October 5, 2009 (incorporated by
reference to Exhibit 10.3 to the Registrants Quarterly Report on Form 10-Q filed on November 13,
2009).10.40
    
    Member Interest Purchase Agreement among the Registrant and TLC Investments, LLC, Jamie Hall, and
Robert E. Wilson dated December 31, 2009 (incorporated by reference to Exhibit 10.40 to the
Registrants Annual Report on Form 10-K filed on March 31, 2010).10.41
    
    Convertible Promissory Note from the Registrant to TLC Investments, LLC, Jamie Hall, and Robert E.
Wilson dated December 31, 2009 (incorporated by reference to Exhibit 10.41 to the Registrants Annual
Report on Form 10-K filed on March 31, 2010).10.42
    
    Warrant Acquisition Agreement between the Registrant and Woodstone Engery, LLC dated December 31, 2009
(incorporated by reference to Exhibit 10.42 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.43
    
    Form of Bonding Support Agreement dated as of December 29, 2009 (incorporated by reference to Exhibit
10.43 to the Registrants Annual Report on Form 10-K filed on March 31, 2010).10.44
    
    Form of Warrant Acquisition Agreement for bonding support dated as of December 29, 2009 (incorporated
by reference to Exhibit 10.44 to the Registrants Annual Report on Form 10-K filed on March 31, 2010).10.45
    
    Form of Agreement of Confidentiality and Non-Competition for employees including officers (incorporated
by reference to Exhibit 10.45 to the Registrants Annual Report on Form 10-K filed on March 31, 2010).10.46
    
    Purchase Agreement between the Registrant and Lincoln Park Capital Fund, LLC dated March 17, 2010
(incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on
March 19, 2010).10.47
    
    Registration Rights Agreement between the Registrant and Lincoln Park Capital Fund, LLC dated March 17,
2010 (incorporated by reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K filed on
March 19, 2010).10.48
    
    Note Purchase Agreement between the Registrant and EF Energy Partners LLC dated March 30, 2010
(incorporated by reference to Exhibit 10.48 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.49
    
    Secured Subordinated Promissory Note from the Registrant to EF Energy Partners LLC dated March 30, 2010
(incorporated by reference to Exhibit 10.49 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.50
    
    Warrant Acquisition Agreement among the Registrant and the investors named therein dated March 30, 2010
(incorporated by reference to Exhibit 10.50 to the Registrants Annual Report on Form 10-K filed on
March 31, 2010).10.51
    
    Form of Management Continuity Agreement for Executive Officers (incorporated by reference to Exhibit
10.1 to the Registrants Quarterly Report on Form 10-Q filed on May 13, 2010).10.52
    
    2008 Incentive Stock Plan (as amended November 19, 2008 and February 25, 2010) (incorporated by
reference to Exhibit 99.1 to the Registrants Registration Statement on Form S-8 filed on September 8,
2010).10.53
    
    Form of Notice of Stock Option Grant for 2008 Stock Incentive Plan (incorporated by reference to
Exhibit 99.2 to the Registrants Registration Statement on Form S-8 filed on September 8, 2010).21.1
    
    Subsidiaries of the Registrant (filed with this Report).23.1
    
    Consent of Plante & Moran, PLLC, Independent Registered Public Accounting Firm (filed with this Report).23.2
    
    Consent of Grant Thornton, LLP, Independent Registered Public Accounting Firm (filed with this Report).24.1
    
    Power of Attorney (filed with this Report).31.1
    
    Rule 13a-14(a) Certification by Chief Executive Officer (filed with this Report).31.2
    
    Rule 13a-14(a) Certification by Chief Financial Officer (filed with this Report).32.1
    
    Section 1350 Certification of Chief Executive Officer (filed with this Report).32.2
    
    Section 1350 Certification of Chief Financial Officer (filed with this Report).
 
 *
    
    Confidential treatment has been granted with respect to certain portions of this agreement.
    
    Management contract or compensatory plan or arrangement. 79