August 28, 2023
CEO Transition at Energy Focus
Lesley Matt dismissed after 11-month stint at beleaguered $6 million company
Lesley Matt was appointed Chief Executive Officer of Energy Focus, Inc. on September 12, 2022. Last week, on August 24, 2023, the Board of Directors of Energy Focus approved her termination. Chiao Chieh Jay Huang, previously a board member and still a major shareholder, will replace her as the new CEO. Additionally, Huang will step down as Chairman of the Board.
For Matt, stepping into a new leadership role, especially from an external organization, was fraught with challenges. The complexities of understanding a new corporate culture, aligning with different team dynamics and repositioning the brand can be daunting for even the most seasoned executive.
Taking the reins at Energy Focus was no ordinary undertaking for Matt. The company was grappling with dwindling sales and consistent quarterly losses. Beyond the internal challenges, the broader lighting and construction sectors faced significant headwinds. Supply chain disruptions and escalating costs were pervasive, making the task of reviving an already ailing firm even more demanding.
Declining sales and profits: Recent earnings reports indicate that Energy Focus continues to face revenue and profit setbacks. The company's quarterly revenues have fluctuated between $663,000 and $1.8 million, with seven-figure quarterly net losses reported. Energy Focus, which once recorded annual revenues surpassing $60 million in 2015, witnessed a downturn, recording only $6 million in the latest fiscal year.
Stock challenges: The stock price for Energy Focus, a Nasdaq Capital Market-listed entity, had been under threat of Nasdaq delisting since it failed to adhere to the minimum bid price and stockholders' equity prerequisites. Despite having until May 15, 2023, to remedy these issues, Energy Focus failed to secure another 180-day extension. With its stock not surpassing $1.00 since July 2022 and trading at a low of $0.47 in early May, the company has suggested a reverse stock split, with proposed ratios varying between 1-for-2 and 1-for-10. Eventually the company implemented a 1-for-7 reverse stock split.
Board reorganization: Kin Fu Chen has been named the new Chairman of the Board. With extensive knowledge of Energy Focus' operations and strategic aims, Chen is poised to provide robust oversight and governance. The Board's decision is based on a strategy to utilize Huang's leadership skills optimally, allowing him to focus on improving operational strategies, fostering innovation, and broadening the company's business scope.
What’s next for Matt? Despite this unsuccessful 1-year stint at Energy Focus, Ohio-based Matt still brings an impressive track record that other companies would likely find valuable. Prior to her time at Energy Focus, Matt was recognized in tED Magazine’s 30 Under 35 list in 2019. She had a notable career at TCP, climbing the ranks from a marketing position in 2010 to Senior Vice President. In terms of compensation, Matt received an annual base salary of $260,000 with a potential bonus of up to $130,000. She was also provided an option to buy 150,000 shares of the company’s stock, vesting over four years.
