Company Quick10K Filing
Energy Focus
Price0.47 EPS-1
Shares12 P/E-1
MCap6 P/FCF-1
Net Debt-1 EBIT-9
TEV5 TEV/EBIT-1
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-13
S-1 2020-04-09 Public Filing
10-Q 2020-03-31 Filed 2020-05-13
10-K 2019-12-31 Filed 2020-03-24
10-Q 2019-09-30 Filed 2019-11-13
10-Q 2019-06-30 Filed 2019-09-13
10-Q 2019-03-31 Filed 2019-07-22
10-K 2018-12-31 Filed 2019-04-01
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-02
10-K 2017-12-31 Filed 2018-02-22
10-Q 2017-09-30 Filed 2017-11-08
10-Q 2017-06-30 Filed 2017-08-09
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-02-23
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-11
10-Q 2016-03-31 Filed 2016-05-11
10-K 2015-12-31 Filed 2016-03-10
10-Q 2015-09-30 Filed 2015-11-04
10-Q 2015-06-30 Filed 2015-08-05
10-Q 2015-03-31 Filed 2015-05-05
10-K 2014-12-31 Filed 2015-03-12
10-Q 2014-09-30 Filed 2014-11-13
10-Q 2014-06-30 Filed 2014-08-13
10-Q 2014-03-31 Filed 2014-05-13
10-K 2013-12-31 Filed 2014-03-27
10-Q 2013-09-30 Filed 2013-11-13
10-Q 2013-06-30 Filed 2013-08-13
10-Q 2013-03-31 Filed 2013-05-15
10-K 2012-12-31 Filed 2013-03-27
10-Q 2012-09-30 Filed 2012-11-14
10-Q 2012-06-30 Filed 2012-08-14
10-Q 2012-03-31 Filed 2012-05-15
10-K 2011-12-31 Filed 2012-03-30
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-15
10-Q 2011-03-31 Filed 2011-05-12
10-K 2010-12-31 Filed 2011-03-31
10-Q 2010-09-30 Filed 2010-11-12
10-Q 2010-06-30 Filed 2010-08-12
10-Q 2010-03-31 Filed 2010-05-13
10-K 2009-12-31 Filed 2010-03-31
8-K 2020-08-17
8-K 2020-08-13 Earnings, Exhibits
8-K 2020-06-11
8-K 2020-05-13
8-K 2020-05-12
8-K 2020-04-23
8-K 2020-03-19
8-K 2020-01-24
8-K 2020-01-15
8-K 2020-01-09
8-K 2019-12-17
8-K 2019-11-25
8-K 2019-11-13
8-K 2019-09-13
8-K 2019-08-23
8-K 2019-08-14
8-K 2019-08-09
8-K 2019-07-22
8-K 2019-07-19
8-K 2019-06-24
8-K 2019-05-21
8-K 2019-05-20
8-K 2019-05-15
8-K 2019-05-15
8-K 2019-05-06
8-K 2019-04-05
8-K 2019-03-29
8-K 2019-02-21
8-K 2019-01-18
8-K 2018-12-11
8-K 2018-11-07
8-K 2018-08-08
8-K 2018-06-20
8-K 2018-05-18
8-K 2018-05-02
8-K 2018-04-16
8-K 2018-02-22

EFOI 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Note 1. Nature of Operations
Note 2. Basis of Presentation and Summary of Significant Accounting Policies
Note 3. Restructuring
Note 4. Inventories
Note 5. Property and Equipment
Note 6. Leases
Note 7. Debt
Note 8. Income Taxes
Note 9. Stockholders' Equity
Note 10. Commitments and Contingencies
Note 11. Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.2 a20200630exhibit102cro.htm
EX-10.3 a20200630exhibit103fsw.htm
EX-31.1 a20200630exhibit31110-q.htm
EX-31.2 a20200630exhibit31210-q.htm
EX-32.1 a20200630exhibit32110-q.htm

Energy Focus Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
0.10.10.0-0.0-0.1-0.12012201420172020
Assets, Equity
0.10.10.0-0.0-0.1-0.12012201420172020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12012201420172020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
Form 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
 
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _____________ to _____________
      
Commission file number 001-36583
 
ENERGY FOCUS, INC.
(Exact name of registrant as specified in its charter)  
Delaware 94-3021850
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
32000 Aurora Road, Suite B Solon, OH
(Address of principal executive offices)
   
44139
(Zip Code)
(Registrant’s telephone number, including area code): (440) 715-1300
 
None
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
 
Title of each classTrading
Symbol(s)
Name of each exchange
on which registered
Common Stock, par value $0.0001 per shareEFOINASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes     No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes     No
 
The number of outstanding shares of the registrant’s common stock, $0.0001 par value, as of August 10, 2020 was 3,239,874.



TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Page
ITEM 1.FINANCIAL STATEMENTS
  
a.
Condensed Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and December 31, 2019
  
b.
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019 (Unaudited)
  
c.
Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2020 and 2019 (Unaudited)
d.
Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and six months ended June 30, 2020 and 2019 (Unaudited)
 
e.
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (Unaudited)
  
f.Notes to the Condensed Consolidated Financial Statements (Unaudited)
  
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
ITEM 4.CONTROLS AND PROCEDURES
   
PART II - OTHER INFORMATION
   
ITEM 1.LEGAL PROCEEDINGS
ITEM 1A.RISK FACTORS
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
ITEM 4.MINE SAFETY DISCLOSURES
ITEM 5.OTHER INFORMATION
  
ITEM 6.EXHIBITS
  
SIGNATURES

1


PART I - FINANCIAL INFORMATION

Forward-looking statements

Unless the context otherwise requires, all references to “Energy Focus,” “we,” “us,” “our,” “our company” or “the Company” refer to Energy Focus, Inc., a Delaware corporation and its predecessor entity for the applicable periods, considered as a single enterprise.
This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “feels,” “seeks,” “forecasts,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could” or “would” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Quarterly Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies, capital expenditures and the industry in which we operate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.

We believe that important factors that could cause our actual results to differ materially from forward-looking statements include, but are not limited to, the risks and uncertainties outlined under “Risk Factors” under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 and other matters described in this Quarterly Report generally. Some of these factors include:

disruptions in the U.S. and global economy and business interruptions resulting from the recent coronavirus (“COVID-19”) health pandemic outbreak and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;
our need for additional financing in the near term to continue our operations;
our ability to obtain refinancing or extend maturing debt;
our ability to continue as a going concern for a reasonable period of time;
our ability to implement plans to increase sales and control expenses;
our reliance on a limited number of customers for a significant portion of our revenue, and our ability to maintain or grow such sales levels;
our ability to increase sales by adding new customers to reduce the reliance of our sales on a smaller group of customers, and the long sales-cycle that our product requires;
our ability to increase demand in our targeted markets and to manage sales cycles that are difficult to predict and may span several quarters;
the timing of large customer orders, significant expenses and fluctuations between demand and capacity as we invest in growth opportunities;
our ability to compete effectively against companies with lower cost structures or greater resources, or more rapid development efforts, and new competitors in our target markets;
our ability to successfully scale our network of sales representatives, agents, and distributors to match the sales reach of larger, established competitors;
market acceptance of our LED lighting and control technologies and products;
our ability to attract and retain qualified personnel, and to do so in a timely manner;
the impact of any type of legal inquiry, claim or dispute;
general economic conditions in the United States and in other markets in which we operate or secure products;
2


our dependence on military maritime customers and on the levels and timing of government funding available to such customers, as well as the funding resources of our other customers in the public sector and commercial markets;
the possible impact on our military maritime customers and their ability to honor the timing for existing orders or place future orders due to COVID-19 breakouts amongst personnel that might impact the use of ships in service;
business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters, including earthquakes, typhoons, floods and fires or from health epidemics or pandemics or other contagious outbreaks;
our reliance on a limited number of third-party suppliers, our ability to obtain critical components and finished products from such suppliers on acceptable terms and of acceptable quality, and the impact of our fluctuating demand on the stability of such suppliers;
our ability to timely and efficiently transport products from our third-party suppliers to our facility by ocean marine channels;
our ability to respond to new lighting technologies and market trends, and fulfill our warranty obligations with safe and reliable products;
any delays we may encounter in making new products available or fulfilling customer specifications;
any flaws or defects in our products or in the manner in which they are used or installed;
our ability to protect our intellectual property rights and other confidential information, and manage infringement claims by others;
our compliance with government contracting laws and regulations, through both direct and indirect sale channels, as well as other laws, such as those relating to the environment and health and safety;
risks inherent in international markets, such as economic and political uncertainty, changing regulatory and tax requirements and currency fluctuations, including tariffs and other potential barriers to international trade; and
maintain effective internal controls and otherwise comply with our obligations as a public company and under Nasdaq listing standards.

In light of the foregoing, we caution you not to place undue reliance on our forward-looking statements. Any forward-looking statement that we make in this Quarterly Report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments, except as required by law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

Energy Focus®, Intellitube®, RedCap® and EnFocus™ are our registered trademarks. We may also refer to trademarks of other corporations and organizations in this document.
3


ITEM 1. FINANCIAL STATEMENTS
ENERGY FOCUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
June 30,
2020
December 31,
2019
(Unaudited)
ASSETS
Current assets:
Cash$2,727  $350  
Trade accounts receivable, less allowances of $7 and $28, respectively
2,518  2,337  
Inventories, net5,900  6,168  
Prepaid and other current assets677  479  
Total current assets11,822  9,334  
Property and equipment, net415  389  
Operating lease, right-of-use asset1,051  1,289  
Restructured lease, right-of-use asset214  322  
Other assets405  405  
Total assets$13,907  $11,739  
LIABILITIES  
Current liabilities:  
Accounts payable$2,617  $1,340  
Accrued liabilities57  186  
Accrued legal and professional fees307  215  
Accrued payroll and related benefits585  360  
Accrued sales commissions50  32  
Accrued restructuring25  24  
Accrued warranty reserve215  195  
Deferred revenue61  18  
Operating lease liabilities577  550  
Restructured lease liabilities331  319  
Finance lease liabilities3  3  
Warrant liability4,011    
Convertible notes  1,700  
Iliad note, net of discount and loan origination fees603  885  
PPP loan263    
Credit line borrowings, net of loan origination fees1,331  715  
Total current liabilities11,036  6,542  
Other liabilities  14  
Operating lease liabilities, net of current portion623  906  
Restructured lease liabilities, net of current portion  168  
Finance lease liabilities, net of current portion2  4  
PPP loan, net of current maturities532    
Iliad note, net of current maturities  109  
Total liabilities12,193  7,743  
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.0001 per share:
  
Authorized: 5,000,000 shares (3,300,000 shares designated as Series A Convertible Preferred Stock) in 2020 and 2,000,000 shares (no shares designated as Series A Convertible Preferred Stock) in 2019
  
Issued and outstanding: 2,597,470 at June 30, 2020 and no shares outstanding at December 31, 2019
    
Common stock, par value $0.0001 per share:
Authorized: 50,000,000 shares in 2020 and 30,000,000 shares in 2019
Issued and outstanding: 3,216,345 at June 30, 2020 and 2,485,684 at December 31, 2019
    
Additional paid-in capital131,472  128,873  
Accumulated other comprehensive loss(3) (3) 
Accumulated deficit(129,755) (124,874) 
Total stockholders' equity1,714  3,996  
Total liabilities and stockholders' equity$13,907  $11,739  
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


ENERGY FOCUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited) 
Three months ended
June 30,
Six months ended
June 30,
2020201920202019
Net sales$3,335  $3,082  $7,118  $6,259  
Cost of sales1,992  3,191  4,743  6,270  
Gross profit (loss)1,343  (109) 2,375  (11) 
Operating expenses:
Product development313  318  595  844  
Selling, general, and administrative1,973  1,594  4,000  3,835  
Restructuring(14) 128  (28) 262  
Total operating expenses2,272  2,040  4,567  4,941  
Loss from operations(929) (2,149) (2,192) (4,952) 
Other expenses (income):
Interest expense87  26  220  69  
Loss from change in fair value of warrants3,300    2,427    
Other expenses24  79  42  98  
Net loss$(4,340) $(2,254) $(4,881) $(5,119) 
Net loss per share - basic and diluted
Net loss$(1.36) $(0.91) $(1.55) $(2.09) 
Weighted average common shares outstanding:
Basic and diluted *3,192  2,467  3,139  2,446  
* Shares outstanding for prior periods have been restated for the 1-for-5 reverse stock split

The accompanying notes are an integral part of these condensed consolidated financial statements.
5


ENERGY FOCUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(Unaudited)

Three months ended
June 30,
Six months ended
June 30,
 2020201920202019
Net loss$(4,340) $(2,254) $(4,881) $(5,119) 
Other comprehensive loss:
Foreign currency translation adjustments  (2)   (2) 
Comprehensive loss$(4,340) $(2,256) $(4,881) $(5,121) 

The accompanying notes are an integral part of these condensed consolidated financial statements. 
6


ENERGY FOCUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)
Preferred
Stock
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive Loss
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmountShares*Amount
Balance at December 31, 2019  $  2,486  $  $128,873  $(3) $(124,874) $3,996  
Issuance of common stock under employee stock option and stock purchase plans—  —  5  —  —  —  —    
Issuance of common stock and warrants—  —  688  —  2,749  —  —  2,749  
Offering costs on issuance of common stock and warrants—  —  —  —  (474) —  —  (474) 
Warrant liability—  —  —  —  (1,636) —  —  (1,636) 
Conversion of notes to preferred stock2,709  —  —  —  1,769  —  —  1,769  
Stock-based compensation—  —  —  —  20  —  —  20  
Net loss for the three months ended March 31, 2020—  —  —  —  —  —  (541) (541) 
Balance at March 31, 20202,709  $  3,179  $  $131,301  $(3) $(125,415) $5,883  
Issuance of common stock under employee stock option and stock purchase plans—  —    —  30  —  —  30  
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units—  —  —  —  (3) —  —  (3) 
Issuance of common stock upon the exercise of warrants—  —  15  —  103  —  —  103  
Issuance of common stock upon conversion from preferred stock(112) —  22  —  —  —  —  —  
Stock-based compensation—  —  —  —  41  —  —  41  
Net loss for the three months ended June 30, 2020—  —  —  —  —  —  (4,340) (4,340) 
Balance at June 30, 20202,597  $  3,216  $  $131,472  $(3) $(129,755) $1,714  

*Shares outstanding for prior periods have been restated for the 1-for-5 reverse stock split
7


ENERGY FOCUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands)
(Unaudited)
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders'
Equity
Shares*Amount
Balance at December 31, 20182,418  $  $128,368  $(1) $(117,315) $11,052  
Adjustment to beginning retained earnings upon adoption of Topic 842
—  —  —  —  (186) (186) 
Issuance of common stock under employee stock option and stock purchase plans30  —  —  —  —  —  
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units(10) —  (111) —  —  (111) 
Stock-based compensation—  —  543  —  —  543  
Net loss for the three months ended March 31, 2019—  —  —  —  (2,865) (2,865) 
Balance at March 31, 20192,438  $  $128,800  $(1) $(120,366) $8,433  
Issuance of common stock under employee stock option and stock purchase plans36  —  —  —  —  —  
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units—  —  (5) —  —  (5) 
Stock-based compensation—  —  (20) —  —  (20) 
Foreign currency translation adjustment—  —  —  (2) —  (2) 
Net loss for the three months ended June 30, 2019—  —  —  —  (2,254) (2,254) 
Balance at June 30, 20192,474  $  $128,775  $(3) $(122,620) $6,152  


*Shares outstanding for prior periods have been restated for the 1-for-5 reverse stock split


The accompanying notes are an integral part of these condensed consolidated financial statements.
8


ENERGY FOCUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Six months ended
June 30,
20202019
Cash flows from operating activities:
Net loss$(4,881) $(5,119) 
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation92  200  
Stock-based compensation61  523  
Change in fair value of warrant liabilities2,427    
Provision for doubtful accounts receivable(12) 38  
Provision for slow-moving and obsolete inventories(319) (303) 
Provision for warranties20  106  
Amortization of loan discounts and origination fees76  45  
Loss on dispositions of property and equipment  15  
Changes in operating assets and liabilities:
Accounts receivable(169) 358  
Inventories587  693  
Prepaid and other assets(198) 447  
Accounts payable1,277  (1,526) 
Accrued and other liabilities293  (580) 
Deferred revenue43  (17) 
Total adjustments4,178  (1) 
Net cash used in operating activities(703) (5,120) 
Cash flows from investing activities:  
Acquisitions of property and equipment(118) (28) 
Net cash used in investing activities(118) (28) 
Cash flows from financing activities:
Proceeds from the issuance of common stock and warrants2,750    
Proceeds from the exercise of warrants51    
Offering costs paid on the issuance of common stock and warrants
(474)   
Proceeds from PPP loan795    
Principal payments under finance lease obligations(2) (1) 
Proceeds from exercise of stock options and employee stock purchase plan purchases30    
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units(3) (116) 
Payments on the Iliad Note(526)   
Net proceeds from (payment on) credit line borrowings577  (568) 
Proceeds from convertible notes  1,700  
Net cash provided by financing activities3,198  1,015  
Effect of exchange rate changes on cash  5  
Net increase (decrease) in cash and restricted cash2,377  (4,128) 
Cash and restricted cash, beginning of period692  6,335  
Cash and restricted cash, end of period$3,069  $