To Lead in LED Lighting Retrofit

To Lead in LED Lighting Retrofit

Safe Harbor Statement This presentation may contain some statements that may be considered forward-looking statements. These forward-looking statements may include statements relating to financial projections or other statements relating to the company s plans, objectives, expectations or intentions. These matters involve risks and uncertainties, and actual results may differ materially from those projected or implied in the forward-looking statements. Factors that could cause actual results to materially differ from the forward-looking statements in this presentation are set forth in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. 2

Company Evolution 2013 The New Energy Focus Our Vision: To Be A Trusted Leader in LED Lighting Retrofit 3

Emphasis on LED Fluorescent Retrofit (1) Internal estimate (2) Department of Energy With the result that Energy Focus offers the best value LED tube for fluorescent retrofit currently and expects to maintain and increase that leadership with a 30% improvement in efficiency coming in 2014 4

Initial Vertical Markets Navy ESCO C&I Navy committed to LED conversion M- IntelliTube - only lamp to meet spec $23 Million contract in place EFOI highest value LED tube Strong relationships with super 16 ESCOs 17% LED tube market share in 2012 125+lpw tube will cross C&I <2yr payback threshold in 2014 C- IntelliTube LED and Cricket controls assure continuing value creation Developing strong relationships with key, large accounts 5

Why Energy Focus? 1 2 3 4 Captive Military Markets $23 million Navy contract is the launching pad for the $500+ million US Navy, Military Sealift Command (MSC) and coastal guard markets Leading in the emerging ESCO Markets U.S. Energy Savings Performance Contracting (ESPC), a $400 million per year market provides significant, near-term (1-3 years) retrofit opportunity for LED Solutions and Products businesses Entering the C&I market with explosive growth ahead 5.4 billion fluorescent sockets in C&I sectors worldwide and 964 million in the U.S., with potential market size of $50+ billion and $10 billion respectively within the next 5-7 years Industry unique LED technology IntelliTube Intelligent, plug and play replacement for linear fluorescent lamps with capability of wireless control validated by the Navy 6

Growth Catalyst & Game Changer IntelliTube is a revolutionary new LED lighting system that will propel EFOI into the $50+ billion commercial building lighting industry» IntelliTube is a LED plug and play replacement for a linear fluorescent lamp found in most commercial buildings with the added capability of wireless control» Developed with >$30 million from the DOD, NASA, DOE & DARPA» Utilizes only a single LED and a unique optical wave-guide delivery technology, which is more energy efficient, significantly lower cost and provides for a higher quality of light» Wireless control capability for daylight harvesting and smart grid applications» Leverages EFOI s patented technology Pixelation Proprietary optical coupler captures maximum light from the LED Scattered light experiencing a Fresnel reflection is recirculated for extraction using a proprietary recombination technology which yields a >95% optical efficiency. Light is scattered within the rod by a proprietary optical pattern and coating. 7

LED Lighting: Explosive Growth Ahead * DOE LED Status Report 2012. 1. Lighting the Way-2012 LED Market Report, McKinsey Co. 8

Market Transformation Occurring Now Magnetic to Electronic Fluorescent Example We about here in the value proposition for LEDs 1. Buildings Energy Data Book: (http://buildingsdatabook.eren.doe.gov/docs/databooks/2011_bedb.pdf) 9

Energy Use and Lumens - Commercial 10

LED Tubes: At Infancy, Rapidly Emerging Installed base for LED tubes 11

Military Growth Opportunity US Navy After multiple development contracts, EFOI was awarded a $23 million contract to supply the Navy with LED fixtures, including its proprietary IntelliTube lamps U.S. Navy is investing $2 billion to increase energy efficiency and to transition to a Green Fleet by 2016. LED lighting is a key initiative. U.S. Naval fleet represents a $300 million replacement market with over 270 large vessels in the fleet EFOI has established a first-mover position working with the Navy since 2003 on transition to LEDs EFOI is the only Navy mil-spec qualified LED replacement lamp provider with zero failure since first installation in 2007 12

Blue Chip Customers Energy Focus has a diverse group of high profile customers 2012 Huron Consulting Group. All Rights Reserved. Proprietary & Confidential. US Navy, MSC & Coastal Guards Total addressable market: $500+ million Replacing current Navy lamps and lighting fixtures with LEDs Relationship began in 2003 with R&D, proto-typing and specification consulting contract First product installed in 2007 with landmark $23 million contract awarded August 2011 Existing Federal, Commercial & Industrial Buildings $50+ billion total addressable market Upgrade metal halide and fluorescent Lowest cost with rigorous quality standards 13 IntelliTube is a key differentiator & growth driver

DesignLights Consortium or DCL is the Energy Star for LED tubes Members include 61 regional, state, utility, and energy efficiency programs Why have a DLC listing? Listed products qualify projects for rebates Many manufactures, including EFOI, have obtained DLC listing The goal is to have a listed products with the fewest watts and highest efficiency to produce the most value 14

LPW (out the fixture) DLC Listing Comparison 120 Measured Fixture Luminaire Efficacy (lm/w) 5/31 DLC 2x4 kits 110 100 Want Lowest Wattage / Highest Efficacy EFOI 2013 (low watts) EFOI 2014 (Target) 90 80 70 60 0 10 20 30 40 50 60 70 80 90 A 30% Improvement in LPW for 2014 propels EFOI into position as the building efficiency leader Wattage 15

To Lead in LED Lighting Retrofit 16