Item 1.01. Entry into a Material Definitive Agreement.
Sander Securities Purchase Agreement
On January 17, 2023, Energy Focus, Inc. (the "Company") entered into a
securities purchase agreement (the "Purchase Agreement") with certain purchasers
associated with Sander Electronics, Inc. (the "Purchasers"), pursuant to which
the Company agreed to issue and sell in a private placement (the "Private
Placement") an aggregate of 5,446,252 shares (the "Shares") of the Company's
common stock, par value $0.0001 per share (the "Common Stock"), for a purchase
price per share of $0.5008. Consideration for the transaction included exchange
of approximately $657,000 in the aggregate of outstanding amounts on previous
short-term bridge financings.
Aggregate gross proceeds to the Company in respect of the Private Placement is
approximately $2.1 million, before offering expenses payable by the Company. The
Private Placement closed on January 20, 2023.
The Private Placement was priced at-the-market under the rules of The Nasdaq
Stock Market LLC ("Nasdaq"). The issuance and sale of the Shares pursuant to the
Purchase Agreement are not being registered under the Securities Act of 1933, as
amended (the "Securities Act"), and were made pursuant to certain exemptions
from registration, including Sections 3(a)(9) and 4(a)(2) of the Securities Act
and Regulation D promulgated thereunder, in reliance on the representations and
covenants of the Purchasers under the Purchase Agreement.
Pursuant to the Purchase Agreement, the Company agreed to increase the size of
the Company's board of directors (the "Board") to eight members and to appoint
each of Jay Huang and Wen-Jeng Chang as a director for a term expiring at the
2023 annual meeting of the Company's stockholders or his earlier resignation,
death or removal in accordance with the Company's Bylaws.
Mr. Huang is also one of the Purchasers. The disclosures in Item 5.02 of this
Current Report on Form 8-K relating to Mr. Huang are incorporated by reference
into this Item 1.01.
Registration Rights Agreement
On January 17, 2023, in connection with the Purchase Agreement, the Company
entered into a registration rights agreement (the "Registration Rights
Agreement") with each of the Purchasers. Pursuant to the Registration Rights
Agreement, the Company has agreed to file by February 16, 2023 a registration
statement on Form S-3 (or other appropriate form if the Company is not then S-3
eligible) for the resale by the Purchasers of the Shares and any securities
issued or then issuable in respect of the Shares and to use its commercially
reasonable efforts to have such registration statement declared effective by
March 18, 2023, in the event the registration statement is not reviewed by the
Securities and Exchange Commission (the "SEC"), or by April 17, 2023, in the
event the registration statement is reviewed by the SEC. The Company will use
commercially reasonable efforts to keep such registration statement effective at
all times until all of the registrable securities covered by such registration
statement (i) have been sold, thereunder or pursuant to Rule 144 under the
Securities Act, or (ii) may be sold without volume or manner-of-sale
restrictions pursuant to Rule 144 and without the requirement for the Company to
be in compliance with the current public information requirement under Rule 144.
The foregoing summary descriptions of the Purchase Agreement and the
Registration Rights Agreement are not complete and are qualified in their
entirety by references to the full text of the Form of Purchase Agreement and
the Form of Registration Rights Agreement, which are filed as exhibits to this
Current Report on Form 8-K and are incorporated by reference herein.
Exchange Agreement
As previously disclosed, on September 16, 2022 and November 9, 2022 the Company
sold and issued to Mei Yun (Gina) Huang, a member of the Board, short-term
promissory notes (the "Promissory Notes") totaling an aggregate principal amount
of $800,000. On January 17, 2023, the Company and Ms. Huang entered into
exchange agreements (the "Exchange Agreements") with respect to the Promissory
Notes, pursuant to which the Company and Ms. Huang agreed to exchange (the
"Exchanges") the approximately $809,000 aggregate outstanding amounts
--------------------------------------------------------------------------------
under the Promissory Notes for an aggregate of 1,436,959 shares of Common Stock
(the "Exchange Shares") at a price per share of $0.5630.
The Exchanges were priced at fair market value under the rules of Nasdaq. The
Exchanges of the Exchange Shares pursuant to the Exchange Agreements are not
being registered under the Securities Act, and were effected pursuant to the
exemption provided in Section 3(a)(9) of the Securities Act.
The foregoing summary description of the Exchange Agreements is not complete and
. . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosures in Item 1.01 of this Current Report on Form 8-K are incorporated
by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities
The disclosures in Item 1.01 of this Current Report on Form 8-K are incorporated
by reference into this Item 3.02.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 23, 2023, the Board appointed Chiao Chieh (Jay) Huang as a director
of the Company, effective immediately. The Board affirmatively determined that,
at the time of his appointment, Mr. Huang is an independent director under the
corporate governance standards of Nasdaq. Mr. Huang is one of two nominees the
Company agreed to appoint to the Board pursuant to the Purchase Agreement
described in Item 1.01 of this Current Report on Form 8-K. The disclosures
regarding the Purchase Agreement and the Registration Rights Agreement in Item
1.01 of this Current Report on Form 8-K are is incorporated by reference in this
Item 5.02.
Mr. Huang, 48, has served as President of Sander Electronics, Inc. since 2015,
and after holding positions of increasing responsibility since 1997. As an
innovative entrepreneur, Mr. Huang has more than 20 years of experience with
engineering and management in the LED lighting industry, and he holds over 50
electronic and lighting related patents, including for commercial buildings,
signage, and medical use. In recent years, Mr. Huang has devoted himself to the
development of green energy-related products. In addition to assisting in the
development of energy solutions and energy storage, he has also assisted several
collaborating companies to establish a sustainable governance system. Mr. Huang
graduated from St. John's University with outstanding achievements from the
Department of Electrical Engineering, where he specialized in microelectronic
circuits, computer structure, engineering mathematics, microcomputer
applications, system programming, interfacing technology, and electronic
manufacturing.
Mr. Huang was also appointed to serve as the Chairman of the Board, and former
Chairman, Stephen Socolof, was appointed to serve as Lead Independent Director,
in each case, effective January 23, 2023. Mr. Huang was not appointed to any
committees of the Board at this time.
Mr. Huang will participate in the Company's standard director compensation
program for non-employee directors, which is described on page 37 of the
Company's Proxy Statement for its 2022 annual meeting of stockholders, which was
filed with the Securities and Exchange Commission on April 13, 2022. As
previously disclosed, Mr. Huang was a holder of short-term promissory notes (the
"Jay Huang Notes") issued and sold by the Company with an aggregate principal
amount of $600,000. All outstanding amounts thereon, approximately $607,000 in
the aggregate, were exchanged as part of the consideration for the Purchase
Agreement as discussed above, upon which exchanges the Jay Huang Notes were
retired in full. There are no other related persons transactions involving Mr.
Huang that would require disclosure pursuant to Item 404(a) of Regulation S-K.
--------------------------------------------------------------------------------
Item 7.01. Regulation FD Disclosure.
On January 18, 2023, the Company issued a press release announcing the Private
Placement. A copy of the press release is attached as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this
Item 7.01, including Exhibit 99.1 attached hereto, shall be deemed "furnished"
and shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and such information
shall not be deemed incorporated by reference in any filing under the Securities
Act or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
Form of Securities Purchase Agreement, dated as of January 17, 2023, between the
10.1 * Company and each purchaser named in the signature pages thereto
Form of Registration Rights Agreement, dated as of January 17, 2023, between the
10.2 Company and each purchaser named in the signature pages thereto
Form of Exchange Agreement, dated January 17, 2023, between the Company and Mei
10.3 Yun (Gina) Huang
Second Amendment to Loan and Security Agreement, dated January 18, 2023, between
10.4 the Company and Crossroads Financial Group, LLC
Amendment to Promissory Note, dated January 17, 2023, between the Company and
10.5 Streeterville Capital, LLC
99.1 Press release, dated January 18, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Certain schedules and exhibits to this agreement have been omitted pursuant to
Instruction 4 to Item 1.01 of Form 8-K. A copy of any omitted schedule or exhibit
will be furnished to the SEC upon request.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses
ENERGY FOCUS, INC. 
