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].

Financial Performance - Net sales for Q1 2025 were $0.6 million, a decrease of 26.1% compared to $0.8 million in Q1 2024, driven by a 22.7% decline in military sales and a 32.1% decline in commercial sales year-over-year[4][6] - Net loss for Q1 2025 was $0.3 million, or $(0.05) per share, compared to a net loss of $0.4 million, or $(0.09) per share, in Q1 2024[4][10] - Operating loss for Q1 2025 was $0.3 million, an improvement from a loss of $0.6 million in Q1 2024[4][10] - The company reported a net loss of $268,000 for the three months ended March 31, 2025, compared to a net loss of $294,000 in the previous quarter and $418,000 in the same period last year[28] - Adjusted EBITDA for the three months ended March 31, 2025, was $(263,000), an improvement from $(278,000) in the previous quarter and $(581,000) in the same period last year[28] Profitability Metrics - Gross profit margin improved to 31.5% in Q1 2025, up from 14.4% in Q1 2024, primarily due to reduced fixed costs[4][7] - Adjusted gross margin for Q1 2025 was 33.8%, compared to 22.4% in Q1 2024, reflecting lower fixed production costs despite lower sales volume[4][9] - Actual gross profit for the three months ended March 31, 2025, was $194,000, representing a gross margin of 31.5%, compared to $265,000 (20.7%) in the previous quarter and $120,000 (14.4%) in the same period last year[28] - The adjusted gross margin for the three months ended March 31, 2025, was $208,000, representing 33.8%, compared to $282,000 (22.1%) in the previous quarter and $187,000 (22.4%) in the same period last year[28] Cash Flow and Liquidity - Cash balance as of March 31, 2025, was $0.5 million, down from $0.6 million as of December 31, 2024[4][12] - Cash used in operating activities for the three months ended March 31, 2025, was $(272,000), compared to $(254,000) in the previous quarter and $(58,000) in the same period last year[21] - The total cash at the end of the period was $488,000, down from $565,000 at the end of the previous quarter and $972,000 at the end of the same period last year[23] - The company generated $0.2 million through timely collection of accounts receivable during Q1 2025[4][12] Inventory and Accounts Receivable - The company recorded a provision for slow-moving and obsolete inventories of $14,000 for the three months ended March 31, 2025, compared to $17,000 in the previous quarter and $67,000 in the same period last year[21] - The company experienced a significant decrease in accounts receivable, with a net increase of $223,000 for the three months ended March 31, 2025, compared to a decrease of $(60,000) in the previous quarter and an increase of $1,440,000 in the same period last year[21] Strategic Initiatives - The company plans to focus on expanding in the Gulf Cooperation Council (GCC) region and Central Asia, emphasizing partnerships and local policymaking[3][5] - The company is investing in Energy Storage Systems (ESS), AI data center UPS solutions, and microgrid developments to capitalize on growing market demands[4][5] - The company entered into a private placement agreement to sell 103,627 shares at $1.93 per share, totaling approximately $200 thousand[4][12] - The company issued common stock worth $200,000 during the three months ended March 31, 2025, compared to no issuance in the previous quarter and no issuance in the same period last year[23]

Financial Performance - Energy Focus reported net sales of $4.86 million in 2024, a decrease of 15% compared to $5.72 million in 2023, primarily due to a 16% decline in MMM product sales and a 13% decline in commercial sales [185]. - The gross profit for 2024 was $0.7 million, or 14% of net sales, compared to $0.2 million, or 4% of net sales in 2023, driven by a decrease in fixed and variable costs [188]. - Net loss for 2024 was $1.6 million, a significant improvement from a net loss of $4.3 million in 2023, primarily due to reduced costs [200]. - Net cash used in operating activities was $1.3 million in 2024, improved from $2.4 million in 2023, reflecting better cash management despite ongoing losses [206][207]. - Cash provided by financing activities was $0.1 million in 2024, significantly lower than $4.5 million in 2023, primarily due to reduced stock issuance proceeds [209][210]. Cost Management - Operating expenses decreased significantly from 73.4% of net sales in 2023 to 52.3% in 2024, with selling, general, and administrative expenses dropping from $3.6 million to $2.0 million [184][192]. - The company has undertaken significant cost-cutting measures in 2023 and 2024 to address operational expenses while maintaining customer satisfaction [172]. - The company aggressively reduced its workforce and operating expenses throughout 2023 and into 2024 to manage fixed costs [204]. Debt and Financial Position - The company achieved a gain of $187,000 on debt extinguishment in 2024, related to the early termination of the 2022 Streeterville Note, compared to no such gain in 2023 [194]. - Energy Focus has eliminated all external high-interest debt, improving its financial position and supporting business expansion plans [174]. - As of December 31, 2024, the company had $0.6 million in cash, down from $2.0 million at the end of 2023, with an accumulated deficit of $154.9 million [201][205]. Revenue Challenges - The military maritime (MMM) business faced challenges in 2024 due to delays in government funding and long sales cycles, impacting revenue recognition [174]. - Two major customers accounted for approximately 33% of net sales for the twelve months ended December 31, 2024, indicating a concentration risk [201]. Growth Strategies - The company is focusing on developing new product lines, including Energy Storage Systems (ESS) and GaN Power Supplies, to enhance its market position [175]. - The company plans to achieve profitability by launching new products, including Redcap® emergency battery backup tubular TLEDs, and exploring GaN-based power supply circuitry [203]. - Energy Focus is actively seeking additional external funding to support its growth strategies and initiatives [176]. - The company continues to seek external funding alternatives to support its growth strategies and initiatives [204]. Tax and Valuation - The effective tax rate for both 2024 and 2023 was 0%, with a full valuation allowance recorded against deferred tax assets due to net operating losses [197][198]. Inventory and Commitments - The company has approximately $0.3 million in outstanding purchase commitments for inventory as of December 31, 2024, with 88% related to a single party [212]. Investing Activities - The cash used in investing activities was $19 thousand in 2024, primarily for property and equipment acquisitions, down from $69 thousand in 2023 [208].

Sales Performance - Net sales for Q3 2024 were $1.2 million, a decrease of $0.1 million, or 11%, compared to Q3 2023 net sales of $1.3 million, primarily due to a 30% decrease in commercial sales [142]. - For the first nine months of 2024, net sales increased to $3.6 million, up $0.3 million, or 8%, compared to the same period in 2023, driven by a 25% increase in MMM product sales [143]. - Three major customers accounted for approximately 39% of net sales for the nine months ended September 30, 2024 [159]. Profitability and Loss - Gross profit for Q3 2024 was 16% of net sales, compared to a gross loss of 4% in Q3 2023, attributed to a 7% decrease in fixed costs and a 78% increase in variable costs [144]. - Net loss for the three months ended September 30, 2024, was $0.3 million, a 67% decrease from the $0.9 million net loss in the same period of 2023 [156]. - Net loss for the nine months ended September 30, 2024, was $1.3 million, a 63% decrease from the $3.4 million net loss in the same period of 2023 [157]. Operating Expenses - Operating expenses for Q3 2024 were 49% of net sales, down from 63.8% in Q3 2023, reflecting significant cost-cutting efforts [140]. - Product development expenses for Q3 2024 were $137 thousand, a 4% decrease from Q3 2023, primarily due to lower payroll-related expenses [147]. - Selling, general, and administrative expenses for Q3 2024 were $0.4 million, down 37% from $0.7 million in Q3 2023, driven by reduced payroll and consulting fees [149]. Cash Flow and Financial Position - Cash balance at September 30, 2024, was approximately $0.8 million, down from $2.0 million at December 31, 2023 [164]. - Net cash used in operating activities was $1.0 million for the nine months ended September 30, 2024, compared to $2.4 million for the same period in 2023 [166][167]. - Interest expense decreased to $5 thousand for the first nine months of 2024, down from $226 thousand in the same period of 2023 [152]. - Gain on debt extinguishment recognized was $187 thousand for the three and nine months of 2024, with no such gain in the same periods of 2023 [152]. - Other income for the nine months ended September 30, 2024, was $30 thousand, compared to $16 thousand for the same period in 2023 [154]. - The company had an accumulated deficit of $154.6 million as of September 30, 2024 [159]. Strategic Focus and Challenges - The company continues to face challenges from long sales cycles and unexpected delays in MMM and commercial customer projects, impacting revenue generation [131]. - Strategic investments by Sander Electronics, Inc. in 2023 and 2024 have provided meaningful external capital and opportunities to improve the supply chain [130]. - The company is focusing on a demand-oriented approach to enhance customer loyalty and align products and services with customer needs [132]. - The company has implemented a comprehensive value model to analyze customer loyalty and improve service consistency throughout the customer journey [133]. - The company plans to develop and launch new products, including Redcap emergency battery backup tubular TLEDs, to achieve profitability [163].

Financial Performance - Net sales for Q3 2024 were $1.2 million, a decrease of 10.7% compared to $1.3 million in Q3 2023, driven by a 29.7% decline in commercial sales[2][9] - Net sales for Q3 2024 were $1,196,000, a decrease of 22.9% from $1,553,000 in Q2 2024 and an increase of 4.3% from $1,339,000 in Q3 2023[20] - Military maritime products generated $846,000 in net sales for Q3 2024, an increase from $841,000 in Q3 2023, while commercial sales decreased to $350,000 from $498,000[23] Profitability - Gross profit margin improved to 15.7% in Q3 2024, up from a gross loss of (3.6)% in Q3 2023, primarily due to lower fixed costs[3][10] - Gross profit for Q3 2024 was $188,000, compared to a gross loss of $48,000 in Q3 2023, indicating a significant improvement in profitability[20] - Actual gross profit for the quarter was $188,000, representing a gross margin of 15.7%, compared to a gross margin of 8.1% in the previous quarter[28] - Adjusted gross margin for Q3 2024 was 24.5%, significantly higher than 1.0% in Q3 2023, reflecting improved variable margins[11] - Adjusted gross profit increased to $293,000, reflecting a gross margin of 24.5%, up from 18.3% in the previous quarter[28] Losses and Expenses - Operating loss for Q3 2024 was $0.4 million, an improvement from a loss of $0.9 million in Q3 2023[4][12] - Net loss for Q3 2024 was $0.3 million, or $(0.06) per share, compared to a net loss of $0.9 million, or $(0.27) per share, in Q3 2023[4][12] - The net loss for Q3 2024 was $316,000, a decrease from a net loss of $944,000 in Q3 2023, representing a 66.5% improvement[20] - Adjusted EBITDA for Q3 2024 was $(395,000), compared to $(937,000) in Q3 2023, showing a 57.8% improvement[27] - Total operating expenses decreased to $586,000 in Q3 2024 from $855,000 in Q3 2023, reflecting a reduction of 31.5%[20] Cash Flow and Liquidity - Cash balance as of September 30, 2024, was $0.8 million, down from $2.0 million at the end of 2023[5][17] - Cash used in operating activities for Q3 2024 was $(267,000), a decrease from $(1,035,000) in Q3 2023, indicating improved cash flow management[22] - Cash at the end of Q3 2024 was $819,000, down from $1,691,000 at the end of Q3 2023[22] - Net cash used in operating activities for the nine months ended September 30, 2024, was $1.0 million, with a net loss of $1.3 million during the same period[13] Financing Activities - The company raised approximately $850 thousand through a private placement of 534,591 shares at $1.59 per share in June 2024[6] - The company issued common stock and warrants totaling $851,000 in Q2 2024, contributing to financing activities[22] Strategic Initiatives - The company plans to expand its product portfolio by adding high-efficiency GaN power supply products in 2023[14] - The company is focusing on reducing operating expenses and improving gross margins through strategic adjustments in product development and inventory management[24] Liabilities - Total liabilities decreased to $3.2 million as of September 30, 2024, from $7.1 million at the end of 2023[18] Inventory Management - Changes in excess and obsolete inventory reserves amounted to $105,000, which is 8.8% of net sales, compared to 10.2% in the previous quarter[28]

Financial Performance - Net sales for Q2 2024 were $1.6 million, an increase of $0.5 million, or 47%, compared to Q2 2023, primarily driven by a 95% increase in MMM sales [122]. - Gross profit for Q2 2024 was 8% of net sales, down from 17% in Q2 2023, due to an 8% decrease in fixed costs and a 20% unfavorable change in inventory reserves [124]. - Total operating expenses for Q2 2024 were $0.7 million, a decrease of 52% compared to $1.5 million in Q2 2023, driven by reductions in payroll and consulting fees [126]. - The company incurred a net loss of 35.7% of net sales in Q2 2024, compared to a net loss of 110.5% in Q2 2023 [121]. - Net loss for the three months ended June 30, 2024 was $0.6 million, a 53% decrease from $1.2 million in the same period of 2023; for the six months ended June 30, 2024, net loss was $1.0 million, down 61% from $2.5 million in 2023 [133]. - Cash balance at June 30, 2024 was approximately $1.1 million, down from $2.0 million at December 31, 2023; net cash used in operating activities was $0.8 million in 2024 compared to $1.3 million in 2023 [138][142]. Cost Management - Interest expense decreased to $5 thousand for the first six months of 2024 from $192 thousand in the same period of 2023, with no cash interest paid in 2024 compared to $70 thousand in 2023 [129]. - The company recognized a gain of $187 thousand on debt extinguishment in the first six months of 2024, related to the early termination of the 2022 Streeterville Note, with no such gain in 2023 [130]. - The company has significantly reduced its workforce to manage fixed costs and is actively seeking external funding to support growth strategies [134][135]. Sales and Market Strategy - The MMM business faced challenges in 2023 due to delayed government funding and long sales cycles, impacting revenue generation [110]. - The company is focusing on a demand-oriented approach to enhance customer loyalty and service quality [113]. - The company is implementing a comprehensive value model to align products, pricing, and customer service throughout the customer journey [114]. - The company continues to face aggressive price competition in the lighting industry, impacting overall financial performance [112]. - Two major customers accounted for approximately 40% of net sales for the six months ended June 30, 2024, indicating sales concentration risk [134]. - The company aims to expand sales channels and enter new markets to provide additional growth opportunities, targeting key verticals such as government, healthcare, and education [137]. Product Development - Product development expenses for Q2 2024 were $140 thousand, down 5% from Q2 2023, primarily due to lower payroll-related expenses [125]. - The company plans to develop and launch new products, including Redcap emergency battery backup tubular TLEDs and GaN-based power supply circuitry, to achieve profitability [137]. - As of June 30, 2024, the company had approximately $1.1 million in outstanding purchase commitments for inventory, with $1.1 million expected to ship in Q3 2024 [143]. External Investments - Strategic investments in 2023 and 2024 by Sander Electronics contributed meaningful external capital and opportunities to improve the supply chain [111]. - The company generated $1.2 million from collection of accounts receivable during the first six months of 2024, compared to $0.3 million from inventory in the same period of 2023 [140][142].

Financial Performance - Net sales for Q2 2024 were $1.6 million, a 47.2% increase from $1.1 million in Q2 2023, driven by a 95.4% increase in military sales[2] - Net sales for the three months ended June 30, 2024, were $1,553,000, a 47.2% increase from $1,055,000 in the same period last year[18] - Net loss for Q2 2024 was $0.6 million, or $(0.12) per share, compared to a net loss of $1.2 million, or $(0.42) per share, in Q2 2023[3] - The net loss for the three months ended June 30, 2024, was $554,000, an improvement from a net loss of $1,167,000 in the same period last year[22] - Adjusted EBITDA for the three months ended June 30, 2024, was $(557,000), compared to $(1,060,000) for the same period last year[22] Profitability - Gross profit margin decreased to 8.1% in Q2 2024 from 17.0% in Q2 2023, primarily due to unfavorable changes in inventory reserve[2] - Actual gross profit for the quarter was $126,000, representing a gross margin of 8.1%, down from 17.0% in the previous year[23] - Adjusted gross margin for Q2 2024 was 18.3%, compared to 6.8% in Q2 2023, despite a sequential decrease from 22.4% in Q1 2024[8] - Adjusted gross profit increased to $284,000, with a gross margin of 18.3%, compared to 6.8% in the same quarter of 2023[23] - Gross profit for the three months ended June 30, 2024, was $126,000, compared to $179,000 for the same period last year, reflecting a gross margin decrease[15] Expenses and Losses - Loss from operations improved to $0.6 million in Q2 2024, compared to a loss of $1.1 million in Q2 2023[3] - Total operating expenses for the three months ended June 30, 2024, were $683,000, down from $1,279,000 in the same period last year, indicating a 46.5% reduction[15] Cash and Liquidity - Cash balance as of June 30, 2024, was $1.1 million, down from $2.0 million at the end of 2023[3] - Cash at the end of the period was $1,105,000, a decrease from $1,316,000 at the end of June 30, 2023[17] - The company reported a total availability of $1,105,000 as of June 30, 2024, down from $1,520,000 at the same time last year[21] Equity and Liabilities - Total liabilities decreased to $3.554 million as of June 30, 2024, from $7.149 million at the end of 2023[14] - Total stockholders' equity increased to $3.522 million as of June 30, 2024, compared to $3.051 million at the end of 2023[14] Shareholder Activity - The company completed a private placement on June 21, 2024, raising approximately $0.85 million by issuing 534,592 shares at $1.59 per share[4] - The company issued $851,000 in common stock during the three months ended June 30, 2024, compared to $1,304,000 in the same period last year[17] - The weighted average shares of common stock outstanding increased to 4,785,000 for the three months ended June 30, 2024, from 2,766,000 in the same period last year[15] Product Development - The company plans to add high-efficiency GaN power supply products to its portfolio in 2024[12] Military Sales - Military maritime products sales for the three months ended June 30, 2024, were $1,198,000, significantly up from $613,000 in the same period last year[18] Inventory Management - The reserve for excess and obsolete inventory increased to $158,000, reflecting a 10.2% change, compared to a negative reserve of (107,000) in the same quarter last year[23]

Financial Performance - For Q1 2024, total net sales decreased by $0.1 million, or 10%, to $0.8 million compared to Q1 2023 net sales of $0.9 million, driven by a decrease in MMM sales by $75 thousand and commercial sales by $22 thousand [144]. - Gross profit margin improved to $120 thousand, or 14% of net sales, in Q1 2024, compared to $17 thousand, or 2% of net sales, in Q1 2023, primarily due to a decrease in fixed costs and favorable variances in material and labor [145]. - Operating expenses for Q1 2024 were $0.6 million, down 45% from $1.1 million in Q1 2023, attributed to reductions in payroll, commissions, and software contracts [148]. - The net loss for Q1 2024 was $0.4 million, a 69% decrease from the net loss of $1.3 million in Q1 2023, mainly due to lower fixed costs [152]. - As of March 31, 2024, the company had $972 thousand in cash and no outstanding debt, with an accumulated deficit of $153.7 million [153]. - Net cash used in operating activities for the three months ended March 31, 2024, was $0.1 million, significantly improved from $1.2 million in the same period of 2023 [157][158]. - The net loss for the three months ended March 31, 2024, was $0.4 million, compared to a net loss of $1.3 million for the same period in 2023 [157][158]. - The company generated $1.4 million from the collection of accounts receivable during the first three months of 2024, reflecting improved cash flow management [157]. Strategic Focus - The company is focusing on innovation and cost reduction strategies to enhance product offerings and maintain competitiveness in the LED lighting market [130]. - The company is actively seeking external funding to support growth strategies and has received strategic investments from Sander Electronics, Inc. [134]. - The company is implementing a demand-oriented approach to enhance customer relationships and loyalty through improved service models [137]. - The company continues to seek additional external funding alternatives to support its growth strategies and initiatives [155]. Operational Challenges - The MMM business faced challenges due to delayed government funding and long sales cycles, impacting revenue generation [132]. - The company has reduced its workforce significantly throughout 2023 into 2024 to manage fixed costs [155]. - The company is pursuing existing and new sales opportunities while facing longer sales cycles for made-to-order products [155]. Product Development - The EnFocus™ platform offers dimmable and color-tunable lighting solutions, enabling energy-efficient upgrades without extensive rewiring [135]. - The company plans to reintroduce the second generation of EnFocus™ powerline control switches and circadian lighting system in 2024 due to supply chain challenges [155]. - The company has approximately $557 thousand in outstanding purchase commitments for inventory as of March 31, 2024 [162]. Cash Flow and Financing - As of March 31, 2024, the company's cash balance was approximately $972 thousand, a decrease from approximately $2.0 million at December 31, 2023 [156]. - Net cash used in financing activities during the three months ended March 31, 2024, was $1.0 million, related to net payments on the 2022 Streeterville Note [160].

Financial Performance - Net sales for Q1 2024 were $0.8 million, a decrease of $0.1 million or 10.4% compared to Q1 2023, primarily due to a $75 thousand decrease in military maritime sales and a $22 thousand decrease in commercial sales[3] - Net sales for Q1 2024 were $833,000, a decrease of 65.2% from $2,393,000 in Q4 2023 and a decrease of 10.4% from $930,000 in Q1 2023[19] - Gross profit for Q1 2024 was $120,000, representing a gross margin of 14.4%, compared to 3.1% in Q4 2023 and 1.8% in Q1 2023[26] - Loss from operations was $0.6 million, an improvement from a loss of $1.2 million in Q1 2023 and $0.8 million in Q4 2023[3] - The company reported a loss from operations of $599,000 in Q1 2024, compared to a loss of $765,000 in Q4 2023 and $1,203,000 in Q1 2023[19] - Net loss for Q1 2024 was $0.4 million, or $(0.09) per share, compared to a net loss of $1.3 million, or $(0.58) per share, in Q1 2023[3] - The net loss for Q1 2024 was $418,000, an improvement from a net loss of $849,000 in Q4 2023 and $1,333,000 in Q1 2023[20] - Adjusted EBITDA loss was $0.6 million for Q1 2024, an improvement from a loss of $1.2 million in Q1 2023[10] - Adjusted EBITDA for Q1 2024 was $(581,000), compared to $(680,000) in Q4 2023 and $(1,176,000) in Q1 2023[26] Cash and Assets - Cash decreased to $1.0 million as of March 31, 2024, from $2.0 million as of December 31, 2023, due to the payoff of the Streeterville Notes[3] - Cash at the end of Q1 2024 was $972,000, down from $2,030,000 at the end of Q4 2023 and up from $301,000 at the end of Q1 2023[22] - Total assets decreased to $7.4 million as of March 31, 2024, from $10.2 million as of December 31, 2023[16] Sales Breakdown - Military maritime products accounted for approximately $0.5 million, or 64.1% of total net sales, in Q1 2024, compared to $0.6 million, or 65.5%, in Q1 2023[6] Operating Expenses - Total operating expenses for Q1 2024 were $719,000, a decrease from $840,000 in Q4 2023 and $1,220,000 in Q1 2023[19] Market Expansion and Strategy - The company is exploring new markets in the Gulf Cooperation Council (GCC) and Central Asia regions to expand its business landscape[5] - Energy Focus aims to enhance product efficiency and capabilities through strategic partnerships and innovative technological advancements[5] Accounts Receivable - Accounts receivable increased by $1,440,000 in Q1 2024, compared to a decrease of $682,000 in Q4 2023[20] Cash Flows - The company had no cash flows from investing activities in Q1 2024, compared to $(42,000) in Q4 2023[22]

Financial Performance - Net sales for 2023 were $5.7 million, a decrease of 4.2% compared to 2022, driven by an 85.6% increase in MMM sales and a 57.5% decrease in commercial sales[194]. - Gross profit for 2023 was $0.2 million, or 3.9% of net sales, compared to a gross loss of $(0.3) million, or (5.3)% of net sales in 2022, due to cost reduction efforts[195]. - Net loss for 2023 was $4.3 million, an improvement from a net loss of $10.3 million in 2022, primarily due to reduced costs in goods sold and operating expenses[208]. - The net loss for 2023 was $4.293 million, a significant improvement from a net loss of $10.279 million in 2022, representing a reduction of 58.3%[248]. - For the year ended December 31, 2023, the net loss was $4.293 million, compared to a net loss of $10.279 million for 2022, indicating a significant improvement in financial performance[308]. Cost Management - Gross profit for 2023 was $223,000, compared to a gross loss of $318,000 in 2022, indicating an improvement in cost management[247]. - Total operating expenses decreased to $4.194 million in 2023 from $8.977 million in 2022, reflecting a reduction of 53.3%[247]. - Selling, general, and administrative expenses decreased to $3.6 million, or 63.1% of net sales in 2023, down from $7.1 million, or 119.8% of net sales in 2022[199]. - The company has made significant cost-cutting efforts throughout 2023 while maintaining customer satisfaction and timely delivery of goods[175]. - Research and development expenses were $0.6 million for the year ended December 31, 2023, down from $1.5 million in 2022, reflecting a reduction in product development costs[304]. Cash Flow and Liquidity - Cash balance increased to $2.0 million at December 31, 2023, compared to $52 thousand at December 31, 2022[213]. - Net cash used in operating activities was $2.4 million in 2023, a decrease from $6.7 million in 2022, reflecting improved cash management[214]. - Total cash at the end of 2023 increased to $2.03 million from $52, marking a significant recovery in liquidity[257]. - Cash used in operating activities for 2023 was $2.4 million, down from $6.7 million in 2022, indicating a 64% reduction in cash outflow[262]. - The company reported net accounts receivable of $1.570 million as of December 31, 2023, compared to $445 thousand in 2022[287]. Sales and Market Position - The company has seen growth in quotation opportunities in both MMM and commercial product lines during the fiscal year ended December 31, 2023[178]. - Two major customers accounted for approximately 48% of net sales for the twelve months ended December 31, 2023, indicating sales concentration risk[209]. - Two customers accounted for 48% of net sales in 2023, with sales to the primary distributor for the U.S. Navy representing approximately 35%[320]. - The company continues to face challenges from long and unpredictable sales cycles and aggressive price competition in the lighting industry[181]. - The MMM business faced challenges due to delayed government funding and long sales cycles, but efforts to reduce costs have positioned the company to be more competitive[177]. Strategic Initiatives - The company plans to achieve profitability by increasing sales of innovative products like EnFocus™ and leveraging unique technologies such as RedCap®[179]. - The company is evaluating adjacent technologies, including GaN-based power supplies, to support sustainability in existing channels[179]. - The company is exploring adjacent technologies, including Gallium Nitride (GaN) based power supplies, to enhance its product offerings[260]. - The company plans to reintroduce the second generation of EnFocus™ powerline control switches in 2024, focusing on commercial markets[210]. - The company has focused on diversifying its supply chain to remain competitive amid extreme price competition in the LED lighting industry[174]. Compliance and Regulatory Matters - The company was granted an extension until May 15, 2023, to regain compliance with the Minimum Stockholders' Equity Rule, having reported stockholders' equity of $1.5 million as of September 30, 2022[269]. - On July 27, 2023, the company regained compliance with both the Bid Price Rule and the Minimum Stockholders' Equity Rule, subject to a one-year mandatory panel monitor[273]. - The company is subject to delisting from Nasdaq if it fails to maintain compliance with listing standards during the monitoring period[277]. - The company has made substantial progress towards its plan to regain compliance with Nasdaq listing requirements as of March 31, 2023[272]. Debt and Financing - The company raised $1.8 million in gross proceeds through a security purchase agreement in September 2023[210]. - The Company completed a private placement on September 29, 2023, raising approximately $1.75 million by issuing 853,658 shares at a price of $2.05 per share[360]. - The June 2023 Private Placement raised approximately $1.3 million by issuing 746,875 shares at a price of $1.76 per share[362]. - The Company agreed to restructure the 2022 Streeterville Note, extending its maturity date to December 1, 2024, with scheduled repayments starting January 1, 2024, of approximately $117 thousand per month[344]. - Total debt decreased from $4,879,000 in 2022 to $1,773,000 in 2023[332]. Inventory Management - Inventories decreased to $4.439 million in 2023 from $5.476 million in 2022, a decline of 18.9%[242]. - The company experienced a net decrease of gross inventory levels by $1.0 million and an increase in excess and obsolete inventory reserves by $26 thousand compared to 2022[292]. - The Company had a reserve for excess, obsolete, and slow-moving inventories of $2,553,000 as of December 31, 2023[328]. - One offshore supplier accounted for approximately 28.0% of total expenditures for the twelve months ended December 31, 2023[325]. - Deposits paid on unfulfilled orders totaled $0.8 million and $0.6 million at December 31, 2023, and 2022, respectively, indicating a slight increase in advance payments[323].