Energy Focus(EFOI) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2025 were $0.6 million, a decrease of $0.2 million or 26% compared to Q1 2024 net sales of $0.8 million, driven by a reduction in military demand and high inflation impacting commercial sales [125]. - Gross profit margin improved to $0.2 million or 32% of net sales in Q1 2025, compared to 14% in Q1 2024, primarily due to a 24% decrease in fixed costs [126]. - The net loss for Q1 2025 was $0.3 million, a 36% decrease from the net loss of $0.4 million in Q1 2024, mainly due to lower fixed costs [133]. - Net loss for the three months ended March 31, 2025, was $0.3 million, while the net loss for the same period in 2024 was $0.4 million [139][140]. Cash and Debt Position - As of March 31, 2025, the company had $0.5 million in cash and no outstanding debt, but an accumulated deficit of $155.2 million [134]. - Cash balance as of March 31, 2025, was $0.5 million, a decrease from $0.6 million at December 31, 2024 [138]. - Net cash used in operating activities for the three months ended March 31, 2025, was $0.3 million, compared to $0.1 million for the same period in 2024 [139][140]. - Net cash provided by financing activities was $0.2 million for the three months ended March 31, 2025, compared to a net cash used of $1.0 million in the same period of 2024 [142]. - Net cash used in investing activities was $5 thousand for the three months ended March 31, 2025, with no investing activities reported for the same period in 2024 [141]. Cost Management and Operational Efficiency - Operating expenses decreased significantly, with product development expenses down 61% to $0.1 million in Q1 2025, attributed to reduced payroll-related expenses from workforce reductions [128]. - Significant cost-cutting measures have been implemented, including workforce reductions, to manage fixed costs and streamline operations [137]. Strategic Initiatives - The company is focusing on developing new product lines, including Energy Storage Systems and GaN Power Supplies, to enhance its market position and competitiveness [113]. - The company is pursuing a multi-channel sales strategy targeting key verticals such as government, healthcare, and education to drive growth [136]. - The company continues to seek additional external funding to support its growth strategies and initiatives [114]. - The company has eliminated all external high-interest debt, improving its financial position and supporting business expansion plans [112].