8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December 31, 2009

Energy Focus, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	0-24230	94-3021850
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
32000 Aurora Road, Solon, Ohio		44139
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 440-715-1300

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

On December 31, 2009, the Company acquired all of the member interests of Stones River Companies, LLC, a Tennessee limited liability company ("SRC"), from TLC Investments, LLC, a Tennessee limited liability company ("TLC"), for a combination of cash, debt, an earn-out, and shares of the Company’s common stock. SRC is a lighting retro fit company and an energy systems and solutions provider located in Nashville Tennessee. Jami Hall and Robert E. Wilson of Nashville, Tennessee, own TLC. Mr. Wilson will continue to lead SRC as its Vice President.

The consideration that the Company paid for SRC included $1,500,000 in cash, a promissory note for $500,000, an earn-out of 2.5% of SRC’s total revenues, and 1,000,000 shares of common stock. The principal amount of the promissory note is due at maturity on June 30, 2013 along with accrued interest at the prime rate reported in the Wall Street Journal plus two percent. The note holder may convert the entire principal amount of the note into 500,000 shares of common stock at any time during the period beginning on June 30, 2010 and ending on the maturity date. The earn-out covers the period from January 1, 2010 through June 30, 2013. The 1,000,000 shares that are part of the purchase price and the 500,000 shares covered by the convertible promissory note are entitled to registration rights.

The Company will file financial statements of SRC, and pro forma financial statements of the Company and SRC, no later than March 19, 2010.

On January 5, 2010, the Company issued a press-release announcing the acquisition. A copy of the press release is furnished as Exhibit 99.1 and included in this Report by reference.

Item 3.02 Unregistered Sales of Equity Securities.

As part of the acquisition of SRC, the Company issued to TLC 1,000,000 shares of its common stock and a promissory note convertible into 500,000 shares. The terms of those issuances are described in Item 2.01 of this Report and incorporated in this Item by reference.

The offering and issuance of those common shares and warrants were not registered under the Securities Act of 1933, as amended, in reliance upon the exemptions from the registration requirements of the Act in Section 4(2) of the Act and Rule 506 of Regulation D. To make the exemptions available, the Company relied upon the fact that its offers were made without any form of general solicitation and upon the representations of each investor that the investor is an accredited investor, that the investor had full access to information about the Company, and that the investor was acquiring the securities as principal for the investor’s own account and not with a view to or for distributing or reselling the securities. Each investor consented to the placement of a restrictive legend on the certificates representing the investor’s common shares and on the investor’s promissory note.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Energy Focus, Inc.
January 5, 2010	By:	Joseph G. Kaveski
		Name: Joseph G. Kaveski
		Title: Chief Executive Officer

Exhibit Index

Exhibit No.	Description
99.1	Press Release dated January 5, 2010 - Energy Focus, Inc. Acquires Stones River Companies, LLC

EX-99.1

Energy Focus, Inc. Acquires Stones River Companies, LLC
Rob Wilson to continue as business unit leader

Solon, OH – January 5, 2010 – Energy Focus, Inc. (NASDAQ: EFOI), a leader in providing energy efficient lighting solutions, today announced that it acquired Stones Rivers Companies, LLC of Nashville, Tennessee (“SRC”), a leading lighting energy services provider from TLC Investments, LLC, a Tennessee limited liability company (“TLC”) in a transaction valued at approximately $5 million. The acquisition was completed December 31, 2009.

Mr. Joseph Kaveski, CEO, Energy Focus Inc. said: “We are delighted to announce the completion of the SRC acquisition. SRC’s business is based on retrofitting lighting systems in existing public sector buildings. Given the large open order log SRC brings to Energy Focus, we expect to start out 2010 with a dramatic growth in our energy services business — especially since we can combine our two great teams.”

Mr. Kaveski continued, “I am also delighted to announce that Rob Wilson will continue to lead the Energy Focus SRC business unit as its Vice President. Rob’s wealth of experience in managing all aspects of the lighting retrofit business is a critical ingredient to assuring SRC’s continuing profitability and growth.”

Mr. Wilson commented, “I’m looking forward to leading the new Energy Focus team. Energy Focus has excelled at developing energy efficient lighting technology. SRC has excelled at delivering energy efficient lighting to existing buildings. That’s a winning combination.”

Details of the purchase, valued at approximately $5 million, include a $1.5 million cash payment, a cash earn-out of 2.5% of SRC revenue over 42 months, 1.0 million shares of EFOI stock, and a $500,000 note convertible to 500,000 shares of EFOI stock.

Energy Focus, Inc. has received media attention highlighting its new public sector lighting retrofit business direction. A recent article in the Cleveland Plain Dealer http://www.cleveland.com/business/index.ssf/2009/12/energy—focus—of—solon.html takes a look at how Energy Focus’ change toward becoming a turnkey lighting energy services company has helped it look toward growth in a difficult economy.

About Energy Focus

Energy Focus, Inc. is a leading supplier of energy efficient lighting solutions. These solutions provide energy savings, aesthetics, safety and maintenance cost benefits over conventional lighting. Our long-standing relationship with the U.S. Government includes numerous research and development projects for the DOE and DARPA, creating energy efficient LED lighting systems for the U.S. Navy fleet and the next generation Very High Efficiency Solar Cell. Customers include supermarket chains, the US government, state and local governmental agencies, retail stores, museums, theme parks and casinos, hotels, swimming pool builders and many others. Company headquarters are located in Solon, OH, with additional offices in Pleasanton, CA, and the United Kingdom. For more information, see www.energyfocusinc.com.

About TLC Investments

Stones River Companies was a wholly owned subsidiary of TLC Investments which includes Stones River Electric. Stones River Electric was founded by Jami Wilson Hall in 1990 with a vision to take her new company in a different direction from the typical electrical contracting company.  While most electrical contractors were concentrating on the construction market, Stones River Electric specialized in energy management systems, energy conservation projects, lighting upgrades, maintenance contracts and electrical/lighting installation and maintenance.  This innovative approach proved to be very successful in establishing a unique niche in the marketplace.

Stones River Companies was later formed to support the distinct offerings of a lighting solution and design firm.  These services include the design and implementation of energy efficient lighting measures to provide projects and services primarily in a regional marketplace, encompassing several states surrounding Tennessee.  In 2002, Stones River Companies began offering lighting retrofit projects in support of Energy Services Companies serving the public sector existing building market.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include statements regarding our future business outlook, our products, our solutions, and our work with leading customers including governmental agencies. Investors are cautioned that all forward-looking statements involve risks and uncertainties. Actual results may differ materially from the results predicted. For more information about potential factors that could affect Energy Focus financial results, 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.

Media Contact:

            Energy Focus, Inc., Public Relations Office

            (440) 715-1295

Investor Contact:

CleanTech IR, Inc.

310-541-6824
btanous@cleantech-ir.com