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Kin-Fu Chen
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61
|
2023
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Kin-Fu Chen, has founded and managed successful real estate and investment companies, including Yun Fu Yu Co. Ltd., which he has been President of since 2008. Mr. Chen has also established and operated multiple industrial companies and tourism hotels, demonstrating strong leadership, financial acumen, and strategic decision-making skills. He served as a board member for Taiwan’s largest private school. Mr. Chen contributed to strategic planning, governance, and policy development, and collaborated with fellow board members to ensure the school’s growth and success. In working with the Taiwanese government, Mr. Chen has assisted in legislative affairs, including drafting bills, conducting research, and acted as a contact point between the Taiwanese government and the U.S. Congress. He is experienced in facilitating communication and collaborations between legislators and stakeholders. Mr. Chen holds a Master of Diplomacy from National Chengchi University.
Our Board believes that Kin-Fu Chen’s extensive experience in founding and managing successful real estate and investment companies, along with his demonstrated leadership in various industries, uniquely qualify him to serve as a Board member. With a proven track record in strategic decision-making, financial acumen, and governance, Mr. Chen brings invaluable expertise to our Board. His contributions to the growth and success of Taiwan’s largest private school, as well as his involvement in legislative affairs and facilitation of communication between government entities, highlight his commitment to effective governance and collaboration.
Mr. Chen’s academic background, including a Master of Diplomacy from the Graduate Institute of East Asian Studies at National Chengchi University, further enhances his qualifications to contribute meaningfully to our organization.
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Jay (Chiao Chieh) Huang
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51
|
2023
|
Mr. Huang has served as President of Sander Electronics 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.
Our Board believes Mr. Huang
’
s extensive tenure as President of Sander Electronics, coupled with his distinguished service on our Board since January 2023, uniquely qualifies him to serve as a Board member. With over 20 years of leadership in the LED lighting industry and over 50 patents showcasing his innovative spirit, Mr. Huang brings invaluable expertise in engineering, management, and entrepreneurship to our Board.
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Wen-Jeng Chang
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61
|
2023
|
Mr. Chang is an experienced finance executive and mergers & acquisition specialist. Mr. Chang has served in Yuanta Commercial Bank for 25 years, including as the Chief Representative of the Hong Kong representative office, Vice President of the offshore banking branch and the Director of the international business division of Yuanta Commercial Bank. Mr. Chang holds a bachelor’s degree of diplomacy from National Cheng Chi University and a MBA degree from George Washington University. Mr. Chang also holds advanced certifications in corporate governance, sustainability accounting, cybersecurity, and resilience. He is currently a director of Formosa Hotel Co. Ltd. and previously served as a member of the board directors of the Yuanta Savings Bank Philippines, Inc.
Our Board believes Mr. Chang’s strong financial expertise and mergers and acquisitions experience qualify him to serve as a Board member.
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Shou-Jang Lee
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61
|
2023
|
Dr. Shou-Jang Lee, is a published author and contributor to prominent publications in the field of finance and economics. Dr. Lee previously served as a board member of CPE Co., a fuel storage and transporting company, affiliate with the China Petroleum CPC Corporation, Taiwan. He has held key positions in public administration including serving as the General Director of Planning Department within the Yilan County Government, and Secretary to the County Mayor of Yilan County. He is an accomplished financial journalist with expertise in economic and political news coverage and he is recognized as a member of Taiwan’s prestigious national think tank. His leadership and management in public administration has expanded the business and gross income for tourism, manufacturing plants, and agriculture for Yilan county. He is also one of the key persons for developing the newly established Yilan Science Park, while also serving as a trusted advisor to high-ranking government officials and executives in the energy industry. Mr. Lee holds a Ph.D. in Economic Policy from National Chengchi University.
Our Board believes that Dr. Shou-Jang Lee
’
s extensive expertise in finance and economics, coupled with his experience in public administration and strategic leadership, uniquely qualify him to serve as a Board member. As a published author and contributor to prominent publications, Dr. Lee brings a wealth of knowledge and insight to our organization. His tenure as a board member of CPE Co. and his key roles in public administration highlight his ability to navigate complex business environments and drive growth.
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Chao-Jen Huang
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62
|
2023
|
Dr. Chao-Jen Huang is currently Director of Virtual Integrated Business Center, Policy & Economic Alliance Caring of Earth (PEACE) for establishing international collaboration platforms for global resilience and sustainability. From 2013 to 2021, Dr. Huang acted as the director general and distinguished research fellow of Commerce Development Research Institute in Taiwan. In January 2008, Dr. Huang was promoted to director general of the Taiwan Institute of Economic Research and continued to promote economic affairs and cooperation for public and private sectors where he remained until 2011. In February 2005, he became deputy director of the Institute, primarily responsible for Taiwan free trade agreement study, national southbound policy, cross-strait economic cooperation, and Taiwan-Central America comprehensive economic cooperation. From July 1998 to January 2005, Dr. Huang worked as an associate research fellow at the Taiwan Institute of Economic Research, in charge of Taiwan free trade agreement study, national southbound policy and establishing regular economic forums between Taiwan and other nations. From January 1991 to July 1992, Dr. Huang served as senior staff at the Ministry of Foreign Affairs of Taiwan, where he was responsible for Taiwan-United States diplomatic and business exchanges, and economic and trade negotiations and affairs.
Our Board believes that Dr. Chao-Jen Huang’s extensive experience as Director of Virtual Integrated Business Center at PEACE, coupled with his previous roles as director general of the Commerce Development Research Institute and the Taiwan Institute of Economic Research, uniquely qualify him to serve as a Board member.
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Wen-Cheng Chen
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67
|
2024
|
Wen-Cheng Chen, holds a Ph.D. in Economics from NanKai University and a Master of Accountancy from The George Washington University, coupled with CPA certification. With over two decades of extensive experience in financial management, investment, and internal control, the candidate has established a remarkable career trajectory. Highlights include serving as Chief Auditor at Tidehold Development Co., Ltd., where he spearheaded the establishment of a robust internal control system, ensuring regulatory compliance and enhancing operational efficiency. Additionally, their tenure as Vice President at Sunny Bank involved comprehensive financial management, spanning securities investment, liquidity management, and product development. Notably, at KBC Concord Asset Management Co., Ltd., he played a pivotal role in establishing the organization, overseeing regulatory compliance, and facilitating successful fundraising initiatives. Throughout his career, he has contributed articles to esteemed publications and delivered lectures on various financial topics, showcasing their expertise and commitment to advancing industry knowledge.
Our Board believes that Wen-Cheng Chen’s exceptional qualifications, including a Ph.D. in Economics and CPA certification, along with over two decades of extensive experience in financial management and investment, uniquely qualify him to serve as a Board member.
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Gina (Mei Yun) Huang
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61
|
2020
|
Ms. Huang has served as a member of our Board since January 2020. She is the Founder and since January 1994, has been Honorary Chairwoman of Ti Town Technology Limited, an advanced industrial and mechanical equipment manufacturer based in Taiwan that specializes in the design, production, marketing and sales of corrosion-resistant pumps and motors, advanced filters and specialty alloys for semiconductor, electronic and chemical manufacturing industries, with offices across Asia and sales across the world. Since February 1996, Ms. Huang has also been the Founder and Chairwoman of Da Fa Industrial Limited, an investment company focusing on the global mining sector, Ms. Huang has founded each of Brilliant Start Limited and Jag International Limited, both investment companies focusing on technologies and special situations. Brilliant Start Limited and Jag International Limited were both founded in 2012, and Ms. Huang has served as Chairwoman of each since they were founded. Ms. Huang is a significant stockholder in the Company. Ms. Huang received a B.A. degree in Textile Design from Vanung University in Taiwan.
Our Board believes Ms. Huang’s experience in manufacturing and her contacts with manufacturers in Asia as well as her significant investment in the Company qualify her to serve as a Board member.
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Board of Directors Recommendation
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ALL
OF THE NOMINEES LISTED ABOVE.
Executive Officers
The following table sets forth certain information about the executive officers of the Company as of the Record Date. There are no family relationships among any of our directors and executive officers. For biographical information regarding our executive officers, see the discussion under “Biographical Information” below.
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Name
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Position
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Jay (Chiao Chieh) Huang
|
Chief Executive Officer
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Randy Gianas
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Senior Vice President
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Biographical Information
Jay Huang
Mr. Huang has served as a member of our Board since January 2023. Mr. Huang has served as President of Sander Electronics 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.
Randy Gianas
Mr. Gianas joined Energy Focus in October 2020 and is the Vice President of Engineering. From 2019 to 2020, Mr. Gianas served as the President of North Coast Engineered Products and was previously in engineering roles at Kichler Lighting from 2011 to 2018. He has over 10 years of engineering experience for lighting and technology companies. Mr. Gianas received his Bachelor of Science degree in Mechanical Engineering from the Cleveland State University.
Corporate Governance
Director Independence
Our Board has determined that each of the following current directors and nominees is “independent” within the meaning of the Nasdaq Marketplace Rules:
Kin-Fu Chen,
Gina (Mei -Yun) Huang,
Wen-Jeng Chang,
Chao-Jen Huang,
Shou-Jang Lee, and
Wen-Cheng Chen;
In this Proxy Statement these directors are referred to individually as an “Independent Director” and collectively as the “Independent Directors.”
Board Meetings and Committees; Annual Meeting Attendance
Our Board held a total of twenty meetings during the fiscal year ended December 31, 2024. All current directors that served during fiscal year 2024 attended at least 75% of the aggregate number of meetings of the Board and of the committees during their tenure and on which such directors served.
The Company does not have a policy regarding attendance by the directors at the Company’s annual meetings of stockholders. The Company generally encourages, but does not require, directors to attend the Company’s annual meetings of stockholders. All but one of the then-serving directors were present virtually at the last annual meeting of stockholders on June 12, 2024.
Compensation Committee
Our Board has a standing Compensation Committee (the “Compensation Committee”), currently consisting of Mr. Chang, as chair, Ms. Huang, Mr. Lee, and Mr. Chen. Each of the members of the Compensation Committee is an Independent Director and is also independent under the Nasdaq Marketplace Rules for compensation committee membership. The Compensation Committee held three meetings in 2024. The Board has approved a charter for the Compensation Committee
.
A copy of this charter can be found on the Company’s website at
http://investors.energyfocus.com/corporate-governance
. The Compensation Committee’s primary functions are to:
•
receive proposals from management and review and recommend to the Board the corporate goals and objectives relevant to compensation of the Chief Executive Officer, evaluate his or her performance in light of such goals and objectives, and recommend to the Board for approval his or her compensation level based on this evaluation;
•
develop and recommend to the Board compensation arrangements for other executive officers of the Company;
•
review and recommend to the Board incentive compensation plans and equity-based plans, and administer such plans;
•
review and recommend to the Board all other employee benefit plans for the Company; and
•
review and make recommendations to the Board regarding compensation of the Board.
The authority of the Compensation Committee may be delegated to a subcommittee of the Compensation Committee, consisting of one or more directors. Further, the Compensation Committee may delegate certain equity award grant authority and responsibilities (including ministerial duties) under the Company’s equity plan to certain other committees of the Board or to authorized officers of the Company, subject to applicable law. The Chief Executive Officer may provide recommendations regarding compensation of other executive officers. The Compensation Committee is empowered to retain consultants for advice on compensation matters. For more information about the Company’s executive and director compensation programs, see the “Executive Compensation and Other Information” and “Director Compensation” sections of this Proxy Statement.
Compensation Committee Interlocks and Insider Participation
No director currently serving on the Compensation Committee is or has been an officer or employee of the Company or any of the Company’s subsidiaries. No interlocking relationships exist between our Board or Compensation Committee and the board or compensation committee of any other entity, nor has any interlocking relationship existed in the past.
Audit and Finance Committee
The Audit and Finance Committee of the Board (“the Audit and Finance Committee”) acts as the standing audit committee of our Board and currently consists of Mr. Chen, as chair, Mr. Chang, Ms. Huang. The Audit and Finance Committee held four meetings in 2024. Each of the members of the Audit and Finance Committee is an Independent Director and is also independent under the criteria established by the SEC and the Nasdaq Stock Market for audit committee membership. Our Board has determined that Mr. Chen and Mr. Chang each is an “audit committee financial expert,” as defined under the rules of the SEC. Our Board has approved a charter for the Audit and Finance Committee
.
A copy of this charter can be found on the Company’s website at
http://investors.energyfocus.com/corporate-governance
.
The Audit and Finance Committee’s primary functions are to assist our Board in its oversight of the integrity of the Company’s financial statements and other financial information, the Company’s compliance with legal and regulatory requirements, the qualifications, independence and performance of the Company’s independent registered public accounting firm. More specifically, the Audit and Finance Committee:
•
appoints, compensates, evaluates and, when appropriate, replaces the Company’s independent registered public accounting firm;
•
reviews and pre-approves audit and permissible non-audit services;
•
reviews the scope of the annual audit;
•
monitors the independent registered public accounting firm’s relationship with the Company;
•
meets with the independent registered public accounting firm and management to discuss and review the Company’s financial statements, internal controls, and auditing, accounting and financial reporting processes; and
•
reviews managements risk management of legal, compliance and major financial risks.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee currently consists of Mr. Huang, as chair, Ms. Huang, Mr. Lee and Mr. Chang. Each of the members of the Nominating and Corporate Governance Committee is an Independent Director. The Nominating and Corporate Governance Committee held three meetings in 2024. Our Board has approved a charter for the Nominating and Corporate Governance Committee. A copy of this charter can be found on the Company’s website at
http://investors.energyfocus.com/corporate-governance
.
The Nominating and Corporate Governance Committee’s primary functions are to carry out the responsibilities delegated by the Board relating to the Company’s director nominations process and procedures, developing and maintaining the Company’s corporate governance policies, and any related matters required by the Nasdaq Stock Market or federal securities laws. More specifically, the Nominating and Corporate Governance Committee:
•
determines, makes recommendations, and reviews periodically with the Board, the appropriate number of directors that shall constitute the Board, along with the qualifications required to be a director, the Board’s leadership structure and its committee structure and composition;
•
conducts searches for and reviews individuals qualified to become members of the Board;
•
makes recommendations to the Board regarding the selection and approval of the nominees for director to be submitted during the annual meeting of stockholders and identifies and makes recommendations to the Board regarding the selection and approval of candidates to fill vacancies on the Board;
•
evaluates and makes a recommendation to the Board with respect to the “independence” of directors;
•
oversees the Company’s corporate governance practices, procedures, corporate governance guidelines and other governing documents, and other governance matters required by the SEC or Nasdaq Stock Market and makes related recommendations to the Board;
•
oversees the Board’s and committees’ evaluation and charter review process; and
•
develops and recommends to the Board for approval, after taking into account any input provided by the Compensation Committee, a Chief Executive Officer succession plan.
The Nominating and Corporate Governance Committee will consider various candidates for Board membership, including those suggested by other Board members, by any executive search firm engaged by the Nominating and Corporate Governance Committee, and by stockholders. While the Nominating and Corporate Governance Committee does not have minimum qualifications for candidacy, it considers a variety of criteria in assessing potential candidates, including their diversity of personal and professional background, experience, and perspective; personal and professional integrity, ethics and values; experience relevant to the Company’s industry and relevant concerns; practical and mature business judgment, including the ability to make independent analytical inquiries; the ability to commit sufficient time and attention to the activities of the Board; specific experience with accounting, finance, leadership and strategic planning; satisfaction of applicable independence criteria for independent members; and the absence of potential conflicts of interest with the Company’s interests. A stockholder who wishes to suggest a prospective nominee for the Board to consider should notify the Corporate Secretary of the Company or any member of the Nominating and Corporate Governance Committee in writing, with any supporting material the stockholder considers appropriate, at the following address: Energy Focus, Inc., Attention: Corporate Secretary, 32000 Aurora Road, Suite B, Solon, Ohio 44139.
Board Leadership Structure and Role in Risk Oversight
In 2024, we recommitted to building upon the transformation activities that sought to stabilize and regrow our business. These efforts include the following key developments that occurred during 2024:
On June 28, 2023, we accepted the resignation of four members of the Board of Directors (the “Board”): Jennifer Cheng, Brian Lagarto, Jeffery Parker, and Stephen Socolof. Their terms as directors would have otherwise expired at the 2024 annual meeting of Shareholders of the Company. The resignations did not involve any disagreement with the Company. On July 2, 2023, the remaining members of the Board unanimously appointed the following four new members to the Board: Kin-Fu Chen, Shou-Jang Lee, Jason Tien-Chia Tsai, and Chiao Chieh (Jay) Huang, each of the new members of the Board of Directors is an independent director under the corporate governance standards of the Nasdaq.
On August 24, 2023, the Board approved the termination of the Company’s chief executive officer and appointed Chiao Chieh (Jay) Huang to serve as the Company’s new chief executive officer. In line with this decision, Mr. Huang will discontinue his role as Chairman of the Board and the Board has appointed Kin-Fu Chen as the Chairman of the Board.
When a Chairman is in place, the Lead Director serves as a liaison between the Independent Directors, the Chairman, the Chief Executive Officer and the full Board, consults with and advises the Chairman regarding Board matters, calls and chairs meetings of Independent Directors and chairs meetings of the Board when the Chairman is not present.
It is management’s responsibility to manage risk and bring material risks to the attention of the Board. The Board administers its risk oversight role by reviewing strategic, financial and execution risks and exposures associated with the Company’s operations and financial condition; litigation and other matters that may present material risk to our operations, plans, prospects or reputation; acquisitions and divestitures; and senior management succession planning. This oversight role is performed directly and through the committee structure and the committees’ regular reports to our Board. The Audit and Finance Committee reviews risks associated with legal, compliance, cybersecurity and major financial and accounting matters, including financial reporting, accounting, disclosure, internal control over financial reporting and ethics and compliance programs. The Compensation Committee reviews risks related to executive compensation and the design of compensation programs, plans and arrangements (there are no risks that are reasonably likely to have a material adverse effect on the Company). The Nominating and Corporate Governance Committee reviews risks associated with the Company’s corporate governance policies, as well as Nasdaq Stock Market rules and federal securities laws.
Stockholder Communications with the Board
Stockholders may communicate with our Board through the Corporate Secretary of the Company by writing to the following address: Energy Focus, Inc., Attention: Corporate Secretary, 32000 Aurora Road, Suite B, Solon, Ohio 44139. Any such communication should indicate whether the communication is intended to be directed to our entire Board or to a particular director or directors, and must indicate the number of shares of Company stock beneficially owned by the stockholder. Our Corporate Secretary will forward appropriate communications to our Board and/or the appropriate director(s). Inappropriate communications include correspondence that does not relate to the business or affairs of the Company or the functioning of our Board or its committees, advertisements or other commercial solicitations or communications, and communications that are frivolous, threatening, illegal or otherwise not appropriate for delivery to directors.
Insider Trading Policy and Employee, Officer and Director Hedging
Our Board has adopted an Insider Trading Compliance Policy, which governs the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees. This Policy is reasonably designed to promote compliance with insider trading laws, rules, regulations, and applicable listing standards. The Company’s Insider Trading Policy prohibits all of our executive officers, directors and other designated employees from engaging in short sales or investing in other kinds of hedging transactions or financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of the Company’s securities.
Code of Ethics
We have adopted a Code of Ethics and Business Conduct, which applies to all of our directors, officers, and employees. Our Code of Ethics and Business Conduct can be found on our website at www.energyfocus.com.
We intend to disclose on our website any amendment to, or waiver from, a provision of our Code of Ethics and Business Conduct that applies to our directors and executive officers, including our principal executive officer, principal financial officer, principal accounting officer or controller, or any persons performing similar functions, and that is required to be publicly disclosed pursuant to the rules of the SEC.
PROPOSAL NO. 2: INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
RATIFICATION PROPOSAL
General
Our Board recommends that the stockholders ratify the selection of GBQ Partners LLC (“GBQ”) as the Company’s independent registered public accounting firm to audit our accounts and those of our subsidiaries for the fiscal year ending December 31, 2025. The Audit and Finance Committee approved the selection of GBQ as our independent registered public accounting firm for fiscal year 2025.
We engaged GBQ as our independent registered public accounting firm on May 24, 2019. In order to ensure continuing auditor independence, the Audit and Finance Committee periodically considers whether there should be a regular rotation of the independent registered public accounting firm. The members of the Audit and Finance Committee and the Board believe that the continued retention of GBQ to serve as our independent registered public accounting firm is in the best interests of the Company and its stockholders.
We expect that a representative of GBQ will attend the Annual Meeting, and the representative will have an opportunity to make a statement if he or she so chooses. The representative will also be available to respond to appropriate questions from stockholders.
There is no requirement that the Company submit the selection of its independent registered public accounting firm to its stockholders for ratification. In addition, the Sarbanes-Oxley Act of 2002 requires our Audit and Finance Committee to be directly responsible for the appointment, compensation and oversight of the audit work of our independent registered public accounting firm. If our stockholders fail to ratify the selection, the Audit and Finance Committee will reconsider whether to retain GBQ and may retain any firm without re-submitting the matter to our stockholders. Even if the selection is ratified, the Audit and Finance Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
Accountant Fees and Services
GBQ, an independent member of the BDO Alliance USA, provided audit services to the Company for the fiscal years ended December 31, 2024 and December 31, 2023.
The following table presents fees for professional services rendered by GBQ for 2024 and 2023:
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Year Ended December 31,
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2024
|
|
2023
|
|
Audit Fees
|
$
|
185,000
|
|
|
$
|
185,000
|
|
|
Audit-Related Fees
|
866
|
|
|
—
|
|
Tax Fees
|
—
|
|
—
|
|
All Other Fees
|
—
|
|
—
|
|
Total Fees
|
$
|
185,866
|
|
|
$
|
185,000
|
|
Audit Fees
. “Audit Fees” include the aggregate fees billed for professional services rendered. Audit Fees for 2024 and 2023, include fees billed by GBQ for professional services rendered in 2024 and 2023, including audit services related to quarterly reviews and audits of consolidated financial statements, and also include services related to reviews in connection with SEC filings and related consents, and other consultations.
Audit-Related Fees
. “Audit-Related Fees” include assurance and related services by the independent auditors that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees”.
Tax Fees.
“Tax Fees” include professional services rendered by the Company’s independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.
Because we are a smaller reporting company, for both 2024 and 2023, we were not required to obtain an attestation report with respect to our internal control over financial reporting from our independent registered public accounting firm. Therefore, no fees related to that attestation report were incurred.
Pre-Approval Policies and Procedures
It is the Company’s policy that all audit and non-audit services to be performed by the Company’s principal auditors be approved in advance by the Audit and Finance Committee. The Audit and Finance Committee pre-approved all services provided by GBQ during 2024 and 2023.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM RATIFICATION PROPOSAL.
PROPOSAL NO. 3: SAY-ON-PAY PROPOSAL
As required by federal securities laws, we are seeking a vote on an advisory (non-binding) basis to approve the compensation of our Named Executive Officers as disclosed in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to endorse or not endorse the Company’s executive compensation program and policies. At the Annual Meeting, stockholders will be asked to consider, and if thought advisable, to approve, on an advisory (non-binding) basis, with or without variation, the following resolution:
“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation tables and related narrative discussion contained in the proxy statement, dated April 28, 2025, is hereby approved on an advisory basis.”
Our policy is to provide a compensation program that will attract, motivate and retain persons of high quality and provide incentives that align the interests of our employees and directors with those of our stockholders. Your advisory vote on this particular proposal is not intended to address any specific element of the compensation of our Named Executive Officers; rather, the vote relates to our general executive compensation program, which is described in greater detail under the “Executive Compensation and Other Information” heading of this Proxy Statement.
Although this vote is not binding on the Company, we value your opinion and our Compensation Committee will consider the results of your vote on this proposal when making future decisions relating to our executive compensation program.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE SAY-ON-PAY PROPOSAL.
PROPOSAL NO. 4: SAY-ON-FREQUENCY PROPOSAL
The Dodd-Frank Wall Street Reform and Consumer Protection Act added Section 14A to the Exchange Act, which requires that we provide stockholders with the opportunity to vote, on a non-binding, advisory basis, for their preference as to how frequently to vote on future advisory votes on the compensation of our Named Executive Officers as disclosed in accordance with the compensation disclosure rules of the SEC.
Stockholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation once every one, two or three years. Stockholders also may abstain from casting a vote on this proposal.
After careful consideration, our Board has determined that an advisory vote on executive compensation once every two years is the best approach for the Company, and therefore our Board recommends that you vote for a two-year interval for the advisory vote on executive compensation.
Our Board recognizes the importance of stockholder input on executive compensation and has determined that a say-on-pay vote every two years will provide our stockholders with adequate input. The Board believes that a two-year vote cycle gives the Board sufficient time to thoughtfully consider the results of the advisory vote and implement any desired changes to our executive compensation policies and procedures, and will provide investors sufficient time to evaluate the effectiveness of our executive compensation program as it relates to the business outcomes of the Company. Finally, the two-year interval will avoid the additional administrative burden on the Company of engaging in annual votes on executive compensation. Any stockholder who desires to provide input before the expiration of two years is welcome to contact the Board.
The frequency vote is non-binding. Stockholder approval of a one, two, or three-year frequency vote will not require us to implement an advisory vote on executive compensation every one, two or three years. The final decision on the frequency of the advisory vote on executive compensation remains with our Board and/or its committees. Although the frequency vote is non-binding, our Board and the Compensation Committee will consider the outcome of the frequency vote when making future decisions regarding the frequency of future say-on-pay votes.
The proxy card provides stockholders with four choices (every year, every two years, every three years or abstain).
Proxies submitted without direction pursuant to this solicitation will be voted to hold a say-on-pay vote every two years.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR
THE OPTION OF ONCE EVERY TWO YEARS AS THE PREFERRED FREQUENCY FOR ADVISORY VOTES ON EXECUTIVE COMPENSATION.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information with respect to beneficial ownership of common stock as of the Record Date, as to (i) each person known by the Company to beneficially own more than 5% of the outstanding shares of common stock, (ii) each of the Company’s current directors and Named Executive Officers listed below, and (iii) all current executive officers and directors of the Company as a group. Unless otherwise specified, the address for each executive officer and director is 32000 Aurora Road, Suite B, Solon Ohio 44139. Except as otherwise indicated and subject to community property laws where applicable, each person or entity included in the table below has sole voting and investment power with respect to the shares beneficially owned by that person or entity.
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Shares Beneficially Owned
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Percent of Outstanding Common Stock (1)
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|
Name and Address
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5% Stockholders
|
|
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|
Jay (Chiao Chieh) Huang
|
|
784,163
|
(3)
|
14.6
|
%
|
|
Sander Electronic CO., LTD.
|
|
534,592
|
(3)
|
10.0
|
%
|
|
Inwood Holding Limited
|
|
428,077
|
(3)
|
8.0
|
%
|
|
Man Bo Hotel CO LTD
|
|
390,244
|
(4)
|
7.3
|
%
|
|
Lee Chu Cheng
|
|
285,257
|
|
5.3
|
%
|
|
Ming-Hsiang Huang
|
|
283,019
|
|
5.3
|
%
|
|
|
|
|
|
|
|
Directors, Named Executive Officers and Current Directors and Executive Officers as a Group
|
|
|
|
|
|
|
Kin-Fu Chen
|
|
2,852
|
(4)
|
*
|
|
|
Gina (Mei -Yun) Huang
|
|
—
|
|
(2)
|
|
|
|
Wen-Jeng Chang
|
|
—
|
|
|
|
|
|
Chao-Jen Huang
|
|
—
|
|
|
|
|
|
Shou-Jang Lee
|
|
—
|
|
|
|
|
|
Wen-Cheng Chen
|
|
—
|
|
|
|
|
|
Jay (Chiao Chieh) Huang
|
|
See “5% Stockholders” above
|
|
Randy Gianas
|
|
1,627
|
(5)
|
*
|
|
|
All Current Directors and Executive Officers as a Group (8 persons)
|
|
2,141,555
|
|
39.9
|
%
|
*Less than one percent
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based on 5,364,368 shares of common stock outstanding as of the Record Date. In addition, shares of common stock issuable pursuant to options that are currently exercisable, or may become exercisable within 60 days of the Record Date, or pursuant to restricted stock units (“RSUs”) scheduled to vest within 60 days of the Record Date, are included in the reported beneficial holdings of the individual owning such options or RSUs. Pursuant to SEC rules, these issuable shares of common stock have been treated as outstanding in calculating the percentage ownership of the individual possessing such interest, but not for any other individual.
|
|
(2)
|
On January 30, 2020, James Tu and Gina Huang and certain of their respective controlled affiliates (the “Schedule 13D Parties”) filed a Schedule 13D/A that indicated that they may be deemed to be members of a “group” (as such term is defined in Section 13(d)(3) of the Exchange Act and Rule 13d-5(b) promulgated thereunder). This number reflects the beneficial ownership of the group collectively. For information regarding the beneficial ownership of Ms. Huang and Mr. Tu individually. The address for the Schedule 13D Parties is 1 Bridge Plaza North, #275, Fort Lee, New Jersey 07024. Based on our shareholder records as of the Record Date, and in the absence of any coordinated ownership or voting arrangements known to the Company, we do not believe these individuals and entities continue to constitute a group for purposes of beneficial ownership disclosure.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Mr. Huang has shared voting and dispositive power over 1,746,832 shares of common stock held by Sander Electronic CO., LTD. and Inwood Holding Limited. Sander Electronic CO., LTD. and Inwood Holding Limited is a controlled affiliate of Mr. Huang.
|
|
(4)
|
Mr. Chen has shared voting and dispositive power over 393,096 shares of common stock held by Man Bo Hotel CO LTD. Man Bo Hotel CO LTD is a controlled affiliate of Mr. Chen.
|
|
(5)
|
Includes options exercisable to purchase a total of 1,627 shares of common stock, consisting of 1,428 shares at an exercise price of $3.04, 142 shares of common stock at an exercise price of $38.29, and 57 shares of common stock at an exercise price of $48.79, that are exercisable within 60 days of the Record Date.
|
EXECUTIVE COMPENSATION AND OTHER INFORMATION
2024 Summary Compensation Table
During 2024, there was no transition in the Company's executive leadership.
The following table sets forth information about the compensation of Ms. Matt, our former Chief Executive Officer, (who served as our principal executive officer until August 24, 2023), Mr. Warren, our former Senior Vice President
,General Counsel and Corporate Secretary (who served as our principal financial officer until July 31, 2023), Mr. Galluccio, our former Senior Vice President, Product Management and Engineering (who served as our named executive officer until April 30, 2023) , Mr. Huang, our Chief Executive Officer, and Mr. Randy , our Senior Vice President.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
Year
|
|
Salary
($)
| |
Bonus
($)
| |
Stock Awards
($)
| |
Option Awards
($)
| |
Non-Equity
Incentive Plan
Compensation ($)
| |
All Other Compensation
($)
| |
Total
($)
|
|
Lesley A. Matt (1)
|
2023
|
|
179,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
179,028
|
|
|
Former Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James R. Warren (2)
|
2023
|
|
147,149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147,149
|
|
|
Former Senior Vice President, General Counsel and Corporate Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory S. Galluccio (3)
|
2023
|
|
3,964
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,964
|
|
|
Former Senior Vice President, Product Management and Engineering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jay (Chiao Chieh) Huang
|
2023
|
|
3
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
3
|
|
|
Chief Executive Officer
|
2024
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy Gianas
|
2023
|
|
149,999
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149,999
|
|
|
Senior Vice President
|
2024
|
|
150,924
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
150,924
|
|
|
|
|
|
1.
Effective August 24, 2023, Ms. Matt ceased serving as our Chief Executive Officer, and her employment with the Company ended on the same day.
2.
Effective July 31, 2023, Mr. Warren ceased serving as our Senior Vice President, General Counsel and Corporate Secretary and his employment with the Company ended on the same day.
3.
Effective April 30, 2023, Mr. Galluccio ceased serving as our Senior Vice President, Product Management and Engineering and his employment with the Company ended on the same day.
|
Narrative Disclosure to 2025 Summary Compensation Table
The Compensation Committee generally has the responsibility of administering our executive compensation program or making recommendations to the full Board with respect to such program. The Compensation Committee reviews and, as appropriate, makes recommendations to the full Board regarding the base salaries and annual cash incentives for executive officers, and administers our stock incentive plans, including grants of stock options and RSUs.
Compensation Philosophy and Objectives
Our principal executive compensation philosophy is to provide a compensation program that will attract, motivate and retain persons of high quality and provide incentives that align the interests of our management employees with those of our stockholders. In administering the executive compensation program, the Compensation Committee is mindful of the following principles and guidelines, which are supported by the full Board:
•
Base salaries for executive officers should be competitive;
•
A sufficient portion of annual compensation should be at risk in order to align the interests of executives with those of our stockholders;
•
The variable part of annual compensation should reflect both individual and corporate performance; and
•
As a person’s level of responsibility increases, a greater portion of total compensation should be at risk and include more stock-based compensation to provide executives long-term incentives and help to align further the interests of executives and stockholders in the enhancement of stockholder value.
Executive officer compensation has three primary components: base salary, incentives granted under our cash incentive plan, and stock-based awards granted pursuant to the 2020 Plan. In addition, executive officers may receive certain perquisites and personal benefits, plus benefits that are generally available to all salaried employees. We do not have any defined benefit pension plans, non-qualified deferred compensation arrangements, or supplemental retirement plans for our executive officers.
For each Named Executive Officer’s compensation for 2024, the Compensation Committee reviewed the proposed level for each compensation component based on various factors, including at a very general level the median level for the position reflected in the 2023 survey information and other competitive market factors, internal equity and consistency considerations, and an emphasis on pay for performance.
2024 Base Salaries
The Compensation Committee seeks to establish executive officer base salary levels that are competitive compared to our general sense of median salary amounts paid to comparable executives in the market. The Compensation Committee also takes into account a number of largely subjective factors, including changes in an individual’s duties and responsibilities, the personal performance of such executive officer during the prior year, the performance of the Company during the prior year, cost-of-living increases, and such other factors as the Compensation Committee deems appropriate, including the individual’s overall mix between fixed and variable compensation and between cash and stock-based compensation.
Regarding the Named Executive Officers’ annual base salary rates: Mrs. Matt’s salary increased from $70,000 to $179,028 in 2023 and she resigned on August 24, 2023; Mr. Huang’s salary increased from $3 to $12 in 2024 ; Mr. Giannas’s salary increased from $149,999 to $150,924 in 2024; Mr. Warren’s salary decreased from $234,038 to $147,149 in 2023 prior and he resigned on July 31, 2023; and Mr. Galluccio’s salary decreased from $166,961 to $3,964 in 2023 prior and he resigned on April 30, 2023.
2024 Departure, Termination or Change in Control Benefits
Except as set forth below, during 2024, we were not a party to any severance or change in control agreements with any of the Named Executive Officers. We also had no plans, contracts or arrangements (other than those regarding our equity incentive awards described above) during 2024 that provide for payments or benefits to the named executive officers for any departure or termination event, such as death, disability, or termination without cause.
Employment Agreements with Named Executive Officers
We do not have employment agreements with any of our named executive officers other than Jay (Chiao-Chieh) Huang, the CEO of Energy Focus, Inc. which he has signed an employment agreement with Energy Focus, Inc. with a start date of August 25, 2023. The annualized base salary is $12.00.
2024 Savings Plan and Other Benefits
We have established a tax qualified 401(k) plan for our employees, including the named executive officers. The Company does not contribute to this plan.
Our named executive officers are eligible to participate in the same medical, life and disability insurance programs and other welfare plans as the rest of our employees, plus our Employee Stock Purchase Plan, including on substantially similar terms. Previously, certain of our named executive officers received Company-paid contributions for life insurance and supplemental disability policy, as described in the 2024 Summary Compensation Table above.
Outstanding Equity Awards at 2024 Fiscal Year-End
The following table sets forth information with respect to equity awards outstanding for our named executive officers as of December 31, 2024:
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