(EFOI) Closes Follow-On Public Offering of Common Shares

Net Proceeds of $23.7 Million to Support Continuing Growth

SOLON, Ohio, Sept. 25, 2015  — Energy Focus, Inc. (NASDAQ:EFOI), a leader in LED lighting technologies, today announced that on September 16, 2015 it closed its follow-on offering of 3 million shares of its common stock at a price to the public of $17.00 per share. 1.5 million shares were sold by the Company and 1.5 million shares were sold by various investors who provided the necessary financing to see the company through its 2012-2013 restructuring, and remain significant stockholders in the company. Total net proceeds to Energy Focus, Inc. from the offering after deducting underwriting discounts and commissions and estimated offering expenses, were approximately $23.7 million. The Company and the selling stockholders granted the underwriters a 30-day option to purchase up to an additional 450,000 shares of common stock on a pro rata basis.

“This public offering represents another key corporate milestone for Energy Focus,” stated James Tu, Executive Chairman and Chief Executive Officer. “The closing of this transaction provides us with numerous benefits, first and foremost a substantially strengthened balance sheet, including cash of $34 million on a pro forma basis and virtually no long-term debt. A stronger balance sheet enhances our ability to compete for business by mitigating potential concerns about our financial stability or our ability to provide the long-term product warranties and services that customers demand. The additional capital allows us to hire additional personnel as we build our direct sales force while enabling us to take on new initiatives and projects, such as expanding our “Made in America” product lines that we believe will add to our leadership in the military and government sectors, and to provide financing alternatives that could expedite the decision making process by key accounts that we desire to penetrate. Last but not least, the transaction improves our capital structure and liquidity, as we expanded the public float of our shares by approximately 30 percent, with a diverse group of new institutional investors participating in the transaction, now shareholders in our company.”

“The dramatic transformation of Energy Focus which began in mid-2013, up through this equity raise, has our company now positioned to address the most impactful needs for LED lighting adoption to replace fluorescent and high-intensity discharge lighting. Together, according to the Department of Energy’s recent estimate, these retrofit opportunities account for over 60% of energy savings potential through the upgrade of traditional lighting to LEDs. We are as excited as ever about our future as we continue to aggressively develop the pipeline of long-term opportunities with our customers in the specific vertical markets we are targeting – primarily the U.S. and allied foreign navies, military bases, healthcare institutions, K-12 schools, industrial and manufacturing facilities, and national retail chains,” concluded Mr. Tu.

The offering of these securities was made only by means of a prospectus and pursuant to two effective shelf Registration Statements on Form S-3 that have been filed with the Securities and Exchange Commission (the “SEC”). A final prospectus supplement and accompanying base prospectuses related to the offering have been filed with the SEC and are available on the SEC’s website at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectuses relating to the offering may also be obtained from Oppenheimer & Co. Inc., Attention: Syndicate Prospectus Department, 85 Broad Street, 26th Floor, New York, NY 10004, Phone: (212) 667-8563, Email: EquityProspectus@opco.com.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer or a solicitation of any offer to buy, or a sale of, these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.  

Forward Looking Statements:

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, these statements can be identified by the use of words such as “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could,” “would” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from Energy Focus’ forward-looking statements. These risks and uncertainties include, but are not limited to our history of operating losses; general economic conditions in the United States and in other markets in which we operate; our reliance on a limited number of customers, in particular our sales of products for the U.S. Navy, for a significant portion of our revenue; our ability to implement and manage our growth plans and control expenses to increase sales and improve margins; our dependence on government customers and on the levels of funding available to such customers and our ability to satisfactorily fulfill our contractual obligations to such customers; market acceptance of LED lighting technology; our ability to respond to new lighting technologies and market trends with safe and reliable products; our ability to compete effectively against companies with greater resources; our ability to protect our intellectual property rights and the impact of any type of legal claim or dispute; our ability to obtain critical components and finished products from third-party suppliers on acceptable terms; risks inherent in international markets, such as economic and political uncertainty, changing regulatory and tax requirements and currency fluctuations; and our ability to maintain effective internal controls and otherwise comply with our obligations as a public company. In light of the foregoing, we caution you not to place undue reliance on our forward-looking statements. For more information about potential factors that could affect the financial results of Energy Focus, please refer to the Company’s SEC reports, including its Annual Reports on Form 10-K and its quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date hereof. Energy Focus disclaims any intention or obligation to update or revise any forward-looking statements.

About Energy Focus, Inc.:

Energy Focus, Inc. is a leading provider of energy efficient LED lighting products and a developer of energy efficient lighting technology. Our LED lighting products provide energy savings, aesthetics, safety and maintenance cost benefits over conventional lighting. Our long-standing relationship with the U.S. Government continues to enable us to provide energy efficient LED lighting products to the U.S. Navy and the Military Sealift Command fleets. Customers include national, state and local U.S. government agencies as well as Fortune 500 companies and many other commercial and industrial clients. Company headquarters are located in Solon, OH. For more information, see our web site at www.energyfocusinc.com.

CONTACT: Investor Contacts:

         Energy Focus, Inc.
         Investor Relations
         (440) 715-1300
         ir@energyfocusinc.com

         or

         Darrow Associates, Inc.
         Peter Seltzberg, Managing Director
         (516) 510-8768
         pseltzberg@darrowir.com