What changed in ACORN ENERGY, INC.'s 2023 10-K compared to 2022?

Across the narrative sections we track, ACORN ENERGY, INC. (ACFN) added 172 paragraphs, removed 194, and edited 117 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+85/−89), Item 1A. Risk Factors (+48/−62), Item 1. Business (+29/−27).

Did ACORN ENERGY, INC. add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 48 new/edited paragraphs and 62 removed paragraphs versus the 2022 10-K.

What changed in ACORN ENERGY, INC.'s MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 85 new/edited paragraphs and 89 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this ACFN 10-K diff come from?

The source filings are ACORN ENERGY, INC.'s official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in ACORN ENERGY, INC.'s 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of ACORN ENERGY, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+172 added−194 removedSource: 10-K (2024-03-07) vs 10-K (2023-03-16)

Top changes in ACORN ENERGY, INC.'s 2023 10-K

172 paragraphs added · 194 removed · 117 edited across 6 sections

Item 7. Management's Discussion & Analysis+85 / −89 · 41 edited
Item 1A. Risk Factors+48 / −62 · 43 edited
Item 1. Business+29 / −27 · 24 edited
Item 7A. Quantitative and Qualitative Disclosures About Market Risk+3 / −9 · 2 edited
Item 2. Properties+5 / −5 · 5 edited

Item 1. Business

Business — how the company describes what it does

24 edited+5 added−3 removed27 unchanged

2022 filing

2023 filing

Biggest changeYear ended December 31, 2022 OmniMetrix Acorn Total Revenues $ 7,000 $ — $ 7,000 Cost of sales 1,929 — 1,929 Gross profit 5,071 — 5,071 Gross profit margin 72 % 72 % R&D expenses 845 — 845 Selling, general and administrative expenses 3,845 959 4,804 Impairment of software 51 — 51 Operating income (loss) $ 330 $ (959 ) $ (629 ) Year ended December 31, 2021 OmniMetrix Acorn Total Revenues $ 6,776 $ — $ 6,776 Cost of sales 1,877 — 1,877 Gross profit 4,899 — 4,899 Gross profit margin 72 % 72 % R&D expenses 739 — 739 Selling, general and administrative expenses 3,235 933 4,168 Operating income (loss) $ 925 $ (933 ) $ (8 ) 3 OMNIMETRIX – POWER GENERATION MONITORING AND CONTROL AND CATHODIC PROTECTION MONITORING AND CONTROL OmniMetrix is a Georgia limited liability company based in Buford, Georgia that develops and markets wireless remote monitoring and control systems and services for critical assets (including stand-by power generators, pumps, pumpjacks, light towers, turbines, compressors, fire pumps and other industrial equipment) and multiple markets in the IoT ecosystem, as well as cathodic protection solutions for the pipeline industry (gas utilities and pipeline companies).

Biggest changeYear ended December 31, 2023 OmniMetrix Acorn Total Revenues $ 8,059 $ — $ 8,059 Cost of sales 2,055 — 2,055 Gross profit 6,004 — 6,004 Gross profit margin 74 % 74 % R&D expenses 875 — 875 Selling, general and administrative expenses 3,998 1,057 5,055 Operating income (loss) $ 1,131 $ (1,057 ) $ 74 Year ended December 31, 2022 OmniMetrix Acorn Total Revenues $ 7,000 $ — $ 7,000 Cost of sales 1,929 — 1,929 Gross profit 5,071 — 5,071 Gross profit margin 72 % 72 % R&D expenses 845 — 845 Selling, general and administrative expenses 3,845 959 4,804 Impairment of software 51 — 51 Operating income (loss) $ 330 $ (959 ) $ (629 ) 3 OMNIMETRIX – POWER GENERATION MONITORING AND CONTROL AND CATHODIC PROTECTION MONITORING AND CONTROL OmniMetrix is a Georgia limited liability company based in Buford, Georgia that develops and markets wireless remote monitoring and control systems and services for critical assets (including stand-by power generators, pumps, pumpjacks, light towers, turbines, compressors, fire pumps and other industrial equipment) and multiple markets in the IoT ecosystem, as well as cathodic protection solutions for the pipeline industry (gas utilities and pipeline companies).

The Patriot Plus Test Station Monitor is also used to provide data points along the pipeline segment powered by the rectifier including AC current density. The industry’s first and patented RAD mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools which drastically reduces company expense while increasing employee safety.

The Patriot Plus Test Station Monitor is also used to provide data points along the pipeline segment powered by the rectifier including AC current density. Additionally, the industry’s first and patented RAD mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools which drastically reduces company expense while increasing employee safety.

We believe that this transition to prognostics sets OmniMetrix apart from its competitors, many of whom are still in the failure reporting phase of application development. OmniMetrix has shifted its primary focus to the commercial and industrial segments from residential due, in part, to the ability to customize our products to the customers’ specifications.

We believe that this transition to prognostics sets OmniMetrix apart from its competitors, many of whom are still in the failure reporting phase of application development. OmniMetrix has also shifted its primary focus to the commercial and industrial segments from residential due, in part, to the ability to customize our products to the customers’ specifications.

While the execution of our aggressive sales strategy was interrupted by the impact of COVID-19, the company has resumed an aggressive sales effort into the market segment requiring less technology and lower price (including the extremely large residential generator market) as well as developing more sophisticated, diagnostic products and custom solutions for commercial and industrial clientele.

While the execution of our aggressive sales strategy was interrupted by the impact of COVID-19, the Company has resumed an aggressive sales effort, including pursuit of the market segment requiring less technology and lower price (the extremely large residential generator market) as well as developing more sophisticated, diagnostic products and custom solutions for commercial and industrial clientele.

OmniMetrix’s PG monitors have been installed on commercial, industrial and residential generators from original equipment manufacturers (“OEMs”) such as Caterpillar, Kohler, Generac, Cummins, Briggs & Stratton, MTU Energy and other generator manufacturers. OmniMetrix provides dual value propositions to the generator service organizations as well as to the machine owner.

OmniMetrix’s PG monitors have been installed on commercial, industrial and residential generators from original equipment manufacturers (“OEMs”) such as Caterpillar, Kohler, Generac, Cummins, Briggs & Stratton, MTU Solutions and other generator manufacturers. OmniMetrix provides dual value propositions to the generator service organizations as well as to the machine owner.

In addition, OmniMetrix continues to see a rapidly growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including terrorist attacks, natural disasters, demand response and cybersecurity threats.

OmniMetrix continues to see a rapidly growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including terrorist attacks, natural disasters, demand response and cybersecurity threats.

There was no diagnostic data opportunity, but service organizations could, at best, practice a reactive service approach. 4 With the advent of second-generation cellular systems and newer, computerized engine controls, OmniMetrix migrated to a design point of collecting large amounts of performance data from remote machinery, allowing service organizations to perform diagnostics on equipment before dispatching service.

There was no diagnostic data opportunity, but service organizations could, at best, practice a reactive service approach. 4 With the advent of second-generation cellular systems and newer, computerized engine controls, OmniMetrix migrated to a design point of collecting large amounts of performance data from remote machinery, which allows service organizations to perform diagnostics on equipment before dispatching service.

These enhanced control panels allowed the service organization to put the right person in the right truck with the right parts to effect a one-trip or a zero-trip solution. At this phase, service organizations could be efficient, proactive, and provide a higher level of customer satisfaction. They could also manage more customers by using remote monitoring.

These enhanced control panels allowed the service organization to put the right person in the right truck with the right parts to affect a one-trip or even a zero-trip solution. At this phase, service organizations could be efficient, proactive, and provide a higher level of customer satisfaction. They could also manage more customers by using remote monitoring.

Since the majority of service and warranty costs are incurred from the service providers, preemptive analysis of customer site conditions prior to dispatch can reduce their labor cost. From the machine owner’s perspective, the OmniMetrix product provides a powerful tool to be used in their constant effort to avoid failures that come from consumables such as batteries and fuel.

Since the majority of service and warranty costs are incurred by the service providers, preemptive analysis of customer site conditions prior to dispatch can reduce their labor cost. From the machine owner’s perspective, the OmniMetrix product provides a powerful tool to be used in their efforts to avoid failures that come from consumables such as batteries and fuel.

The sublease commenced on October 1, 2021 and will run through September 30, 2025, which is the end of the Company’s lease term with its landlord. BACKLOG As of December 31, 2022, OmniMetrix had a backlog of $6.2 million, primarily comprised of deferred revenue, of which $4.0 million is expected to be recognized as revenue in 2023.

The sublease commenced on October 1, 2021 and will run through September 30, 2025, which is the end of the Company’s lease term with its landlord. BACKLOG As of December 31, 2023, OmniMetrix had a backlog of $5.6 million, primarily comprised of deferred revenue, of which $4.0 million is expected to be recognized as revenue in 2024.

Our CEO, who also serves as acting CEO of OmniMetrix, and our CFO, who also serves as COO of OmniMetrix, are hired as consultants to us. OmniMetrix also has consultants that supplement our employed staff and provide monthly recurring services in human resources, accounting and information technology.

Our CEO, who also serves as acting CEO of OmniMetrix, and our CFO, who also serves as COO of OmniMetrix, are hired as consultants to Acorn. OmniMetrix also has consultants that supplement our employed staff and provide monthly recurring services in engineering, human resources, accounting and information technology.

Acorn owns 99% of OmniMetrix, with the remaining 1% owned by OmniMetrix’s former CEO. Following the emergence of IoT applications whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this economic ecosystem.

They are also generally designed for the machine owners’ use, in a reactive application. 5 We believe OmniMetrix has a well-established and well-defended position in the high-performance PG monitoring segment, due to its long history and numerous industry partner projects.

They are also generally designed for the machine owners’ use, in a reactive application, similar to lower-performance, lower-priced market competitors. 5 We believe OmniMetrix has a well-established and well-defended position in the high-performance PG monitoring segment, due to its long history and numerous industry partner projects.

OmniMetrix is now focused on expanding its product offerings while it also continues to execute in its third phase of evolution, maturing the high-performance data collection design point into the first provider offering of automated prognostic solutions.

OmniMetrix is now focused on expanding its product offerings while also executing its third phase of evolution, maturing the high-performance data collection design point into the first provider offering of automated prognostic solutions.

We provide the following products and Internet of Things (“IoT”) applications and services through our OmniMetrix, LLC (“OmniMetrix”) subsidiary: ● Power Generation (“PG”) monitoring. OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment.

We provide the following products and Internet of Things (“IoT”) applications and services through our OmniMetrix, LLC (“OmniMetrix”) subsidiary: ● Power Generation (“PG”) monitoring. OmniMetrix offers PG wireless monitoring and control IoT solutions encompassing wireless remote monitoring devices and applications for both residential and commercial/industrial power generation equipment.

They offer a current generation connectivity replacing telephone dial-up modems that had been used in the past. Their offerings are limited to their own brands, so they do not fit into broad applications like the OmniMetrix products that service all brands.

(2) OEMs such as generator manufacturers or generator controls manufacturers that offer customer connectivity to their machinery. They offer a current generation connectivity replacing telephone dial-up modems that had been used in the past. Their offerings are limited to their own brands, so they do not fit into broad applications like the OmniMetrix products that service all brands.

Customers have provided OmniMetrix feedback telling how customer service teams are able to work “smarter” and more efficiently by going directly to sites with problems, thus increasing the value of their businesses.

Customers have provided OmniMetrix feedback regarding how customer service teams are able to work “smarter” and more efficiently by going directly to problem sites with the appropriate people, parts and solutions, thus increasing the value of their businesses.

RESEARCH AND DEVELOPMENT EXPENSE, NET Research and development expense recorded for the years ended December 31, 2022 and 2021 for our OmniMetrix subsidiary is as follows (amounts in thousands of U.S. dollars): Years ended December 31, 2022 2021 OmniMetrix $ 845 $ 739 6 EMPLOYEES At December 31, 2022, we had a total of 28 employees (all of whom were employed in the United States by OmniMetrix), of whom 26 were full-time and 2 were part-time.

RESEARCH AND DEVELOPMENT EXPENSE, NET Research and development expense recorded for the years ended December 31, 2023 and 2022 for our OmniMetrix subsidiary is as follows (amounts in thousands of U.S. dollars): Years ended December 31, 2023 2022 OmniMetrix $ 875 $ 845 EMPLOYEES At December 31, 2023, we had a total of 25 employees (all of whom were employed in the United States by OmniMetrix), of whom 24 were full-time and 1 was part-time.

ADDITIONAL FINANCIAL INFORMATION For additional financial information regarding our operating segments, foreign and domestic operations and sales, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 11 and 12 to our Consolidated Financial Statements included in this Annual Report.

We have no collective bargaining agreements with any of our employees. 6 ADDITIONAL FINANCIAL INFORMATION For additional financial information regarding our operating segments, foreign and domestic operations and sales, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 12 and 13 to our Consolidated Financial Statements included in this Annual Report.

Eleven of OmniMetrix’s 28 employees are engaged in production, engineering and technical support, ten in marketing and sales and seven in finance and IT. We consider our relationship with our employees to be satisfactory. We have no collective bargaining agreements with any of our employees.

Eleven of OmniMetrix’s 25 employees are engaged in production, engineering and technical support, ten in marketing and sales and four in finance and IT. We consider our relationship with our employees to be positive.

This compares to a backlog of $5.4 million at December 31, 2021.

This compares to a backlog of $6.2 million at December 31, 2022.

Within the CP marketplace, there are no OEM competitors, but there are several companies that provide monitoring capabilities similar to OmniMetrix such as Mobiltex Solutions, Abriox, Elecsys, and American Innovations. We believe that OmniMetrix systems provide greater functionality than these competitors, though those competitors are much larger and have greater resources, potentially enabling better channel penetration than OmniMetrix can accomplish.

There are two types of competitors in the PG marketplace: (1) Independent monitoring organizations (such as OmniMetrix) produce the monitoring systems, but not the equipment being monitored. Among these are companies such as Ayantra, FleetZOOM, Gen-Tracker, and PowerTelematics. The other competitors operate in the reactive “failure notification” mode described in the early stages of the OmniMetrix business model.

There are two types of competitors in the PG marketplace: (1) Independent monitoring organizations produce the monitoring systems, but not the equipment being monitored. Aside from OmniMetrix, such companies include Ayantra, FleetZOOM, Gen-Tracker, and PowerTelematics in the high-performance power generation monitoring segment.

These competitors position themselves in a lower-performance, lower-price quadrant of the market typically due to the lesser amount of data their products can collect from the generator’s control panel compared to OmniMetrix. (2) OEMs such as generator manufacturers or generator controls manufacturers that offer customer connectivity to their machinery.

Other competitors operate in the reactive “failure notification” mode described in the early stages of the OmniMetrix business model. These competitors position themselves in a lower-performance, lower-price quadrant of the market typically due to the lesser amount of data their products can collect from the generator’s control panel compared to OmniMetrix.

Removed

This includes our AIRGuard product, which remotely monitors and controls industrial air compressors and our Smart Annunciator product which is typically sold to commercial customers that require a visual representation of the generator’s status and has a touch-screen display that indicates the current state of that generator. ● Cathodic Protection (“CP”) monitoring.

Added

This suite includes our suite of TrueGuard products as well as our AIRGuard product, designed for remote monitoring and control of industrial air compressors, as well as a Smart Annunciator product.

Removed

OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on oil and gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds.

Added

This Smart Annunciator product, tailored for commercial clients, provides a visual representation of a generator’s status through a touch-screen display, offering real-time updates on its current state. ● Cathodic Protection (“CP”) monitoring. OmniMetrix specializes in CP monitoring, offering remote monitoring and control products specifically tailored for cathodic protection systems utilized in gas pipelines, serving gas utilities market and pipeline operators.

Removed

OmniMetrix also offers the industry’s first RAD TM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools which can drastically reduce a company’s expense while increasing employee safety. During 2022, each of our PG and CP activities represented a reportable segment.

Added

Our CP product lineup, which features solutions for remote monitoring and control of rectifiers, test stations and bonds, is our Hero and Patriot lines of products. Additionally, we offer the RAD TM (Remote AC Mitigation Disconnect), an industry-first innovation designed to mount onto existing Solid-state Decouplers in the field.

Added

This device enables remote disconnection/connection of AC mitigation tools, significantly reducing a customer's expenses while enhancing employee safety. During 2023, each of our PG and CP activities represented a reportable segment.

Added

We believe that OmniMetrix systems provide greater functionality than these competitors, though those competitors are much larger and have greater resources, potentially enabling better channel penetration in the future than OmniMetrix has accomplished in the past.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

43 edited+5 added−19 removed61 unchanged

2022 filing

2023 filing

Biggest changeOur share price may decline due to the large number of shares of our common stock eligible for future sale in the public market including shares underlying options. Almost all of our outstanding shares of common stock are, or could upon exercise of options become, eligible for sale in the public market as described below.

Biggest changeAlmost all of our outstanding shares of common stock are, or could upon exercise of options become, eligible for sale in the public market as described below. Sales of a substantial number of shares of our common stock in the public market, or the possibility of these sales, may adversely affect our stock price.

While we believe we have sufficient cash to finance our operations for at least twelve months from the issuance of the consolidated financial statements contained in this Annual Report, we may need to seek additional sources of funding for long-term corporate costs or if OmniMetrix were not to grow at the rate anticipated and needed additional funds for their operations.

While we believe we have sufficient cash to finance our operations for at least twelve months from the issuance of the audited consolidated financial statements contained in this Annual Report, we may need to seek additional sources of funding for long-term corporate costs or if OmniMetrix were not to grow at the rate anticipated and needed additional funds for their operations.

We may also not be able to locate or employ on acceptable terms qualified replacements for our senior management if their services were no longer available. Loss of the services of a few key employees could harm our operations. We depend on key technical employees and sales personnel.

We may also not be able to locate or employ on acceptable terms qualified replacements for our senior management if their services were no longer available. 7 Loss of the services of a few key employees could harm our operations. We depend on key technical employees and sales personnel.

If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our consolidated financial statements that could require a restatement, or our filings may not be timely, and investors may lose confidence in our reported financial information.

If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our consolidated financial statements that could require a restatement of our consolidated financial statements, or our filings may not be timely, and investors may lose confidence in our reported financial information.

The loss of the services of any of these key managers could materially harm our business, financial condition, future results and cash flow. We do not maintain “key person” life insurance policies on any members of senior management.

The loss of the services of either of these key managers could materially harm our business, financial condition, future results and cash flow. We do not maintain “key person” life insurance policies on any members of senior management.

Not all of the costs associated with OmniMetrix’s corresponding equipment upgrades can be passed on to customers, and any increased expenses are expected to have a negative impact on OmniMetrix’s operating results. 13 A substantial portion of OmniMetrix’s revenues is expected to be generated not from product sales, but from periodic monitoring fees and thus it is continually exposed to risks associated with its customers’ financial stability.

Not all of the costs associated with OmniMetrix’s corresponding equipment upgrades can be passed on to customers, and any increased expenses are expected to have a negative impact on OmniMetrix’s operating results. 12 A substantial portion of OmniMetrix’s revenues is expected to be generated not from product sales, but from periodic monitoring fees and thus it is continually exposed to risks associated with its customers’ financial stability.

Therefore, if we are unsuccessful in retaining customers or are required to spend significant amounts to acquire new customers, our revenue could decrease and/or our operating results could be affected. 12 OmniMetrix is a relatively small company with limited resources compared to some of its current and potential competitors, which may hinder its ability to compete effectively.

Therefore, if we are unsuccessful in retaining customers or are required to spend significant amounts to acquire new customers, our revenue could decrease and/or our operating results could be affected. 11 OmniMetrix is a relatively small company with limited resources compared to some of its current and potential competitors, which may hinder its ability to compete effectively.

While OmniMetrix has significantly reduced its losses and its cash needs from us and we expect positive cash flow from its operations in 2023, we can provide no assurance that OmniMetrix will be able to generate sufficient revenues to allow it to sustain profitability and to have sustained positive cash flows.

While OmniMetrix has significantly reduced its losses and its cash needs from us and we expect positive cash flow from its operations in 2024, we can provide no assurance that OmniMetrix will be able to generate sufficient revenues to allow it to sustain profitability and to have sustained positive cash flows.

We have reported material weaknesses in internal controls over financial reporting as of December 31, 2022 and we cannot assure you that additional material weaknesses will not be identified in the future or that we can effectively remediate our reported weaknesses.

We have reported material weaknesses in internal controls over financial reporting as of December 31, 2023 and we cannot assure you that additional material weaknesses will not be identified in the future or that we can effectively remediate our reported weaknesses.

Although OmniMetrix is not expected to need funding from us in 2023 to support its growth and working capital needs, OmniMetrix has historically been dependent on Acorn’s ability and willingness to provide funding to support its business and growth strategy.

Although OmniMetrix is not expected to need funding from us in 2024 to support its growth and working capital needs, OmniMetrix has historically been dependent on Acorn’s ability and willingness to provide funding to support its business and growth strategy.

As a public company, we incur significant legal, accounting, and other expenses in connection with our reporting requirements. The Sarbanes-Oxley Act of 2002, Dodd-Frank Act and the rules subsequently implemented by the Securities and Exchange Commission (“SEC”) have required changes in corporate governance practices of public companies.

We incur substantial costs as a result of being a public company. As a public company, we incur significant legal, accounting, and other expenses in connection with our reporting requirements. The Sarbanes-Oxley Act of 2002, Dodd-Frank Act and the rules subsequently implemented by the Securities and Exchange Commission (“SEC”) have required changes in corporate governance practices of public companies.

At the present time, the changes from the so-called “3G” to “4G LTE” service have resulted in only limited service interruptions. OmniMetrix anticipates, however, that as new capabilities come online, it will be necessary to have equipment that can readily interface with the newer cellular networks to avoid negative impacts on customer service.

For example, the changes from the so-called “3G” to “4G LTE” service have resulted in only limited service interruptions. OmniMetrix anticipates, however, that as new capabilities come online, it will be necessary to have equipment that can readily interface with the newer cellular networks to avoid negative impacts on customer service.

Fluctuations in our stock price may continue to occur in response to various factors, many of which we cannot control, including: ● general economic and political conditions and specific conditions in the markets we address; ● quarter-to-quarter variations in our operating results; ● strategic investments or divestments; ● announcements of changes in our senior management; ● the gain or loss of one or more significant customers or suppliers; ● announcements of technological innovations or new products by our competitors, customers or us; ● the gain or loss of market share in any of our markets; ● changes in accounting rules; ● changes in investor perceptions; or ● changes in expectations relating to our products, plans and strategic position or those of our competitors or customers. 14 We do not intend to pay dividends to our stockholders in the foreseeable future.

As of March 14, 2023, we had consolidated cash of $1,480,000 which we believe is sufficient for at least the next twelve months. Despite this, we may ultimately not have sufficient cash to allow us to execute our plans, and the occurrence of one or more unanticipated events may require us to make significant expenditures.

As of March 5, 2024, we had consolidated cash of $1,236,000 which we believe is sufficient for at least the next twelve months. Despite this, we may ultimately not have sufficient cash to allow us to execute our plans, and the occurrence of one or more unanticipated events may require us to make significant expenditures.

Integrating acquired companies involves a number of risks that could materially and adversely affect our business, including: ● failure of the acquired companies to achieve the results we expect; ● inability to retain key personnel of the acquired companies; ● dilution of existing stockholders; ● potential disruption of our ongoing business activities and distraction of our management; ● difficulties in retaining business relationships with suppliers and customers of the acquired companies; ● difficulties in coordinating and integrating overall business strategies, sales and marketing, and research and development efforts; and ● difficulties in establishing and maintaining uniform standards, controls, procedures and policies, including accounting controls and procedures. 9 We incur substantial costs as a result of being a public company.

In addition, the market price of our common stock could be subject to wide fluctuations in response to: ● quarterly variations in our revenues and operating expenses; ● announcements of new products or services by us; ● fluctuations in interest rates; ● significant sales of our common stock; ● the operating and stock price performance of other companies that investors may deem comparable to us; and ● news reports relating to trends in our markets or general economic conditions. 8 Penny stock rules will limit the ability of our stockholders to sell their stock.

In addition to the options noted above, at March 14, 2023, there were 170,205 options outstanding that have not yet vested and are not yet exercisable. Substantially all of our currently outstanding shares and shares issuable under our outstanding options are or would be freely tradable. We may have to offer additional securities for sale in the near future.

In addition to the options noted above, at March 5, 2024, there were 13,703 options outstanding that have not yet vested and are not yet exercisable. Substantially all of our currently outstanding shares and shares issuable under our outstanding options are or would be freely tradable. We may have to offer additional securities for sale in the near future.

As the cyber-threat landscape evolves, these attacks are growing in frequency, sophistication and intensity, and due to the nature of some of these attacks, there is also a risk that they may remain undetected for a period of time.

Further, government entities have also been the subject of cyberattacks. As the cyber-threat landscape evolves, these attacks are growing in frequency, sophistication and intensity, and due to the nature of some of these attacks, there is also a risk that they may remain undetected for a period of time.

Any significant acquisition could require substantial use of our capital and may require significant debt or equity financing. We anticipate the need to closely manage our cash for the foreseeable future and cannot provide any assurance as to the availability or terms of any such financing or its effect on our liquidity and capital resources.

We anticipate the need to closely manage our cash for the foreseeable future and cannot provide any assurance as to the availability or terms of any such financing or its effect on our liquidity and capital resources.

Our success is largely dependent on the skills, experience and efforts of our senior management team, including Jan Loeb, CEO of Acorn and Acting CEO of OmniMetrix, who beneficially owns approximately 20.5% of the Company’s stock, Tracy Clifford, CFO of Acorn and COO of OmniMetrix , and Harold Jarrett, our CTO.

We depend on key management for the success of our business. Our success is largely dependent on the skills, experience and efforts of our senior management team, including Jan Loeb, CEO of Acorn and Acting CEO of OmniMetrix, who beneficially owns approximately 21.02% of the Company’s stock, and Tracy Clifford, CFO of Acorn and COO of OmniMetrix.

We could also experience a business interruption, theft of confidential information or reputational damage from industrial espionage attacks, malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. There has been an increase in cybersecurity incidents across all industries, predominantly ransomware and social engineering attacks.

As of that date we had 835,251 options outstanding and exercisable with a weighted average exercise price of $0.41 per share, which if exercised would result in the issuance of additional shares of our common stock.

As of March 5, 2024, 2,487,307 shares of our common stock were issued and outstanding. As of that date we had 79,168 options outstanding and exercisable with a weighted average exercise price of $6.41 per share, which if exercised would result in the issuance of additional shares of our common stock.

This included repayments of $985,000 offset by interest of $179,000, dividends of $76,000 due to Acorn and $190,000 in shared expenses paid by Acorn. During 2021, the intercompany amount due to Acorn from OmniMetrix decreased by $359,000.

This included repayments of $1,285,000 offset by interest of $164,000, dividends of $76,000 due to Acorn and $25,000 in shared expenses paid by Acorn. During 2022, the intercompany amount due to Acorn from OmniMetrix decreased by $540,000.

The existence of a material weakness could result in errors in our consolidated financial statements that could result in a restatement of consolidated financial statements, cause us to fail to timely meet our reporting obligations and cause investors to lose confidence in our reported financial information. 10 If we are unable to protect our intellectual property, or our intellectual property protection efforts are unsuccessful, others may duplicate our technology.

The existence of a material weakness could result in errors in our consolidated financial statements that could result in a restatement of our consolidated financial statements, cause us to fail to timely meet our reporting obligations and cause investors to lose confidence in our reported financial information.

We had one customer that represented 12% of the accounts receivable at December 31, 2022. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising our customer base.

Our cash was deposited with a U.S. bank and amounted to $1,449,000 at December 31, 2023. We had one customer that represented 25% of the accounts receivable at December 31, 2023. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising our customer base.

As of December 31, 2022, OmniMetrix owes Acorn $3,677,000 from such funding support which includes accrued dividends of $266,000, a loan in the principal amount of $2,985,000 and accrued interest and other advances of $426,000. During 2022, the intercompany amount due to Acorn from OmniMetrix decreased by $540,000.

As of December 31, 2023, OmniMetrix owes Acorn $2,657,000 from such funding support which includes accrued dividends of $342,000, a loan with an outstanding principal amount of $2,304,000 and accrued interest and other advances of $11,000. During 2023, the intercompany amount due to Acorn from OmniMetrix decreased by $1,020,000.

The market price of our common stock has fluctuated substantially in the past and is likely to continue to be highly volatile and subject to wide fluctuations. During 2022, our common stock traded at prices as low as $0.26 and as high as $0.63 per share.

The market price of our common stock has fluctuated substantially in the past and is likely to continue to be highly volatile and subject to wide fluctuations.

Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in significant deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations, or result in material misstatements in our financial statements.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. 9 Any failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in significant deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations, or result in material misstatements in our financial statements.

We have invested in industry-appropriate protections and monitoring practices of our data and IT to reduce these risks and continue to monitor our systems on an ongoing basis for any current or potential threats. While we have purchased cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any incurred losses.

We have invested in industry-appropriate protections and monitoring practices of our data and IT and have established a Cybersecurity Steering Committee to reduce these risks and continue to monitor our systems on an ongoing basis for any current or potential threats.

Moreover, as cyber-attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations.

While we have purchased cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any incurred losses. Moreover, as cyber-attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations.

RISKS RELATED TO OMNIMETRIX OmniMetrix has had a history of incurring net losses since it was acquired by us and may never achieve sustained profitability. Although OmniMetrix realized an operating profit of $330,000 in 2022 and $925,000 in 2021, OmniMetrix has a history of incurring operating losses since it was acquired by Acorn in 2012.

Although OmniMetrix realized an operating profit of $1,131,000 in 2023 and $330,000 in 2022, OmniMetrix has a history of incurring operating losses since it was acquired by Acorn in 2012.

Additional financing for OmniMetrix may be in the form of a bank line, a new loan or investment by others, a loan by Acorn, or a combination of the above. The availability and amount of any additional loans from us to OmniMetrix may be limited by the working capital needs of our corporate activities.

The availability and amount of any additional loans from us to OmniMetrix may be limited by the working capital needs of our corporate activities.

While insurance can mitigate some of this risk, due to our current size and operating history, we have been unable to obtain product liability insurance with significant coverage. Our customers may no longer accept the terms we have been able to procure and seek to terminate our existing contracts or cease to do business with us.

While insurance can mitigate some of this risk, due to our current size and operating history, we have been unable to obtain product liability insurance with significant coverage.

Part of our business plan includes the acquisition of new companies either as new platform companies or complimentary companies. Any failure to effectively integrate any future acquisition’s management into our controls, systems and procedures could materially adversely affect our business, results of operations, financial condition and cash flow.

Any failure to effectively integrate any future acquisition’s management into our controls, systems and procedures could materially adversely affect our business, results of operations, financial condition and cash flow. 8 Any significant acquisition could require substantial use of our capital and may require significant debt or equity financing.

The ability of others to use our intellectual property could allow them to duplicate the benefits of our products and reduce our competitive advantage.

Our ability to compete effectively will depend, in part, on our ability to protect our proprietary technology, systems’ designs and manufacturing processes. The ability of others to use our intellectual property could allow them to duplicate the benefits of our products and reduce our competitive advantage.

Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur.

Additional sources of funding may include additional loans from related and/or non-related parties, partial sale of, or finding a strategic partner for, OmniMetrix or equity financing.

Additional sources of funding may include additional loans from related and/or non-related parties, partial sale of, or finding a strategic partner for, OmniMetrix or equity financing. There can be no assurance additional funding will be available at acceptable terms or that we will be able to successfully utilize any of these possible sources to provide additional liquidity.

We intend to reinvest earnings, if any, in the development and expansion of our business. Accordingly, investors will need to rely on sales of your common stock after price appreciation, which may never occur, in order to realize a return on their investment.

Accordingly, investors will need to rely on sales of your common stock after price appreciation, which may never occur, in order to realize a return on their investment. 13 Our share price may decline due to the large number of shares of our common stock eligible for future sale in the public market including shares underlying options.

We rely on a combination of patents, trademarks, copyrights, trade secret laws and restrictions on disclosure to protect our intellectual property rights. Our ability to compete effectively will depend, in part, on our ability to protect our proprietary technology, systems’ designs and manufacturing processes.

If we are unable to protect our intellectual property, or our intellectual property protection efforts are unsuccessful, others may duplicate our technology. We rely on a combination of patents, trademarks, copyrights, trade secret laws and restrictions on disclosure to protect our intellectual property rights.

We believe that the penny stock rules discourage investor interest and limit the marketability of our common stock; however, we have the option to execute a reverse split which could mitigate this issue. Compliance with changing regulations of corporate governance, public disclosure and financial accounting standards may result in additional expenses and affect our reported results of operations.

Compliance with changing regulations of corporate governance, public disclosure and financial accounting standards may result in additional expenses and affect our reported results of operations.

There can be no assurance that our continuing efforts will prevent breakdowns or breaches to our or our third-party providers’ databases or systems that could adversely affect our business. 11 The COVID-19 pandemic could negatively affect various aspects of our business, including our workforce and supply chain, and make it more difficult and expensive to meet our obligations to our customers, and could result in reduced demand from our customers.

There can be no assurance that our continuing efforts will prevent breakdowns or breaches of our and/or our third-party providers’ databases or systems that could adversely affect our business. RISKS RELATED TO OMNIMETRIX OmniMetrix has had a history of incurring net losses since it was acquired by us and may never achieve sustained profitability.

Our financial instruments could subject us to concentrations of credit risk. Our financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade accounts receivable. Our cash was deposited with a U.S. bank and amounted to $1,450,000 at December 31, 2022.

Our customers may no longer accept the terms we have been able to procure and seek to terminate our existing contracts or cease to do business with us. 10 Our financial instruments could subject us to concentrations of credit risk. Our financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade accounts receivable.

This included repayments of $677,000 offset by interest of $194,000, dividends of $76,000 due to Acorn and $48,000 in shared expenses paid by Acorn. We have no assurance that current cash balances plus cash flow from operations will provide sufficient liquidity for OmniMetrix’s working capital needs in 2023.

Removed

There can be no assurance additional funding will be available at acceptable terms or that we will be able to successfully utilize any of these possible sources to provide additional liquidity. 7 We depend on key management for the success of our business.

Added

Part of our business plan includes the acquisition of new companies either as new platform companies or complimentary companies.

Removed

The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.

Added

Removed

Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”.

Added

Additional financing for OmniMetrix may be in the form of a bank line, a new loan or investment by others, an equity raise by Acorn which could then facilitate a loan by Acorn to OmniMetrix, or any combination thereof.

Removed

The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.

Added

During 2023, on an as-adjusted basis to take into account the September 2023 1-for-16 reverse stock split, our common stock traded at prices as low as $4.00 and as high as $8.50 per share.

Removed

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market.

Added

We do not intend to pay dividends to our stockholders in the foreseeable future. We intend to reinvest earnings, if any, in the development and expansion of our business.

Removed

The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account.

Removed

The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.

Removed

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.

Removed

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities.

Removed

As the COVID-19 pandemic progressed, there was an increase in cybersecurity incidents across all industries, predominantly ransomware and social engineering attacks. Further, government entities have also been the subject of cyberattacks.

Removed

As a result of the COVID-19 pandemic, businesses can be shut down, supply chains can be interrupted, slowed, or rendered inoperable, and individuals can become ill, quarantined, or otherwise unable to work and/or travel.

Removed

The full extent to which the COVID-19 pandemic may affect our results of operations, financial condition and cash flows will depend on future developments that are highly uncertain. The pandemic could adversely affect our workforce resulting in serious health issues and absenteeism.

Removed

The pandemic could also substantially interfere with general commercial activity related to our supply chain and customer base, which could have a material adverse effect on our financial condition, results of operations, business, or prospects.

Removed

Some of the electronic devices and hardware we purchase, like antennas, radios, and GPS modules are very specific to our application; there are not likely to be practical alternatives. In some cases, our circuit boards were designed around specific electronic hardware that met our specifications.

Removed

We are working closely with our contract manufacturers and suppliers in order to mitigate as much as possible the risks to our supply chain for these critical devices and hardware, including identifying any lead-time issues and any potential alternate sources.

Removed

We are also examining all currently open purchase orders in an effort to identify whether we need to issue additional orders to secure product that is critical, already has questionable lead times and/or is unique to our requirements.

Removed

OmniMetrix, to date, has been deemed an essential business; however, if this were to change and our operations are curtailed, we may need to seek alternate sources of supply for services and staff, which may be more expensive.

Removed

Alternate sources may not be available or may result in delays in shipments to us from our supply chain and subsequently to our customers, each of which would affect our results of operations. Further, if our customers’ businesses are similarly affected, they might delay or reduce purchases from us, which could adversely affect our results of operations.

Removed

Sales of a substantial number of shares of our common stock in the public market, or the possibility of these sales, may adversely affect our stock price. As of March 14, 2023, 39,757,589 shares of our common stock were issued and outstanding.

Item 2. Properties

Properties — owned and leased real estate

5 edited+0 added−0 removed2 unchanged

2022 filing

2023 filing

Biggest changeOn July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc. to sublease from the Company 1,900 square feet of the unused office space for a monthly sublease payment of $2,375 which includes the base rent plus a pro-rata share of utilities, property taxes and insurance.

Biggest changeOn July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc. to sublease from the Company 1,900 square feet of the unused office space for a monthly sublease payment of $2,375 plus annual escalators (the average monthly sublease payment in 2023 was $2,465), which includes the base rent plus a pro-rata share of utilities, property taxes and insurance.

The estimated amount the Company expects to remit to the landlord each year of the sublease subsequent to December 31, 2022 is $6,100 per year. The sublease commenced on October 1, 2021 and will run through September 30, 2025 which is the end of the Company’s lease term with its landlord.

The estimated amount the Company expects to remit to the landlord each year of the sublease subsequent to December 31, 2023 is $6,500 per year. The sublease commenced on October 1, 2021 and will run through September 30, 2025 which is the end of the Company’s lease term with its landlord.

ITEM 2. PROPERTIES OmniMetrix’s activities are currently conducted in approximately 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, under a lease that expires on September 30, 2025. The annual total rent payment was $124,000 in 2022 and $118,000 in 2021. For 2023, the annual total rent payment will be $125,000.

ITEM 2. PROPERTIES OmniMetrix’s activities are currently conducted in approximately 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, under a lease that expires on September 30, 2025. The annual total rent payment was $128,000 in 2023 and $124,000 in 2022. For 2024, the annual total rent payment will be $129,000.

As of December 31, 2022, after the offset of the investment in leasehold improvements and other expenses related to the sublease, the Company owes its landlord $6,000 for its share of the sublease profit since the lease commencement.

As of December 31, 2023, after the offset of the investment in leasehold improvements and other expenses related to the sublease, the Company owes its landlord $6,500 for its share of the sublease profit since the lease commencement.

Below are the future payments expected under the sublease net of the estimated annual service cost of $2,220 (gross of the estimated amount we expect to remit to our landlord): 2022 2023 $ 26,000 2024 26,000 2025 20,000 Total undiscounted cash flows $ 72,000 ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 15 PART II

Below are the future payments expected under the sublease net of the estimated annual service cost of $2,750 (gross of the estimated amount we expect to remit to our landlord): 2023 2024 $ 28,000 2025 22,000 Total undiscounted cash flows $ 50,000 ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2022 filing

2023 filing

Biggest changeHolders As of March 14, 2023, the last reported sales price of our common stock on the OTCQB marketplace was $0.37, there were 69 record holders of our common stock and we estimate that there were approximately 4,000 beneficial owners of our common stock. ITEM 6. [RESERVED.]

Biggest changeYou should be aware that over-the-counter market quotations may reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions. 15 Holders As of March 5, 2024, the last reported sales price of our common stock on the OTCQB marketplace was $6.00, there were 75 record holders of our common stock, and we estimate that there were approximately 4,000 beneficial owners of our common stock.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded under the symbol “ACFN” on the OTCQB marketplace. You should be aware that over-the-counter market quotations may reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

41 edited+44 added−48 removed12 unchanged

2022 filing

2023 filing

Biggest changeSelected Consolidated Statement of Operations Data: For the Years Ended December 31, 2022 2021 (in thousands, except per share data) Revenue $ 7,000 $ 6,776 Cost of sales 1,929 1,877 Gross profit 5,071 4,899 Research and development expenses 845 739 Selling, general and administrative expenses 4,804 4,168 Impairment of software 51 — Operating loss (629 ) (8 ) Finance expense, net (2 ) (5 ) Loss before income taxes (631 ) (13 ) Income tax expense — — Net loss after income taxes (631 ) (13 ) Non-controlling interest share of loss (2 ) (8 ) Net loss attributable to Acorn Energy, Inc. stockholders $ (633 ) $ (21 ) Basic and diluted net loss per share attributable to Acorn Energy, Inc. stockholders: Net loss per share attributable to Acorn Energy, Inc. stockholders – basic and diluted $ (0.02 ) $ (0.00 ) Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic 39,698 39,688 Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – diluted 39,698 39,688 20 The following table sets forth certain information with respect to revenues and profits of our reportable business segments for the years ended December 31, 2022 and 2021 (dollars in thousands), including the percentages of revenues attributable to such segments.

Biggest changeThis data should be read in conjunction with our consolidated financial statements and related notes included herein. 19 Selected Consolidated Statement of Operations Data: For the Years Ended December 31, 2023 2022 (in thousands, except per share data) Revenue $ 8,059 $ 7,000 Cost of sales 2,055 1,929 Gross profit 6,004 5,071 Research and development expenses 875 845 Selling, general and administrative expenses 5,055 4,804 Impairment of software — 51 Operating income (loss) 74 (629 ) Finance income (expense), net 64 (2 ) Income (loss) before income taxes 138 (631 ) Income tax expense 9 — Net income (loss) after income taxes 129 (631 ) Non-controlling interest share of income (10 ) (2 ) Net income (loss) attributable to Acorn Energy, Inc. stockholders $ 119 $ (633 ) Basic and diluted net income (loss) per share attributable to Acorn Energy, Inc. stockholders: Net income (loss) per share attributable to Acorn Energy, Inc. stockholders – basic and diluted* $ 0.05 $ (0.25 ) Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic* 2,484 2,481 Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – diluted* 2,503 2,481 * As adjusted to account for the September 2023 1-for-16 reverse stock split.

Risk Factors.” All dollar amounts in the discussion below are rounded to the nearest thousand and, thus, are approximate. We currently operate in two reportable operating segments, both of which are performed through our OmniMetrix subsidiary: ● The PG segment which provides wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment.

Risk Factors.” All dollar amounts in the discussion below are rounded to the nearest thousand and, thus, are approximate. We currently operate in two reportable operating segments, both of which are performed through our OmniMetrix subsidiary: ● The PG segment provides wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment.

This includes our AIRGuard product, which remotely monitors and controls industrial air compressors, and our Smart Annunciator product which is typically sold to commercial customers that require a visual representation of the generator’s status and has a touch-screen display that indicates the current state of that generator; and ● The CP segment provides remote monitoring and control products for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators.

Does not include rent amounts to be received under the sublease. **Reflects open purchase orders for components/parts to be delivered over the next twelve months as sales forecast requires. 23

Does not include rent amounts to be received under the sublease. **Reflects open purchase orders for components/parts to be delivered over the next twelve months as sales forecast requires.

RESULTS OF OPERATIONS The selected consolidated statement of operations data for the years ended December 31, 2022 and 2021 and consolidated balance sheet data as of December 31, 2022 and 2021 has been derived from our audited consolidated financial statements included in this Annual Report.

RESULTS OF OPERATIONS The selected consolidated statement of operations data for the years ended December 31, 2023 and 2022 and consolidated balance sheet data as of December 31, 2023 and 2022 has been derived from our audited consolidated financial statements included in this Annual Report.

We expect a moderate increase in R&D expense for 2023 due to engineering salary increases granted effective October 1, 2022 and for continued investment in work on certain initiatives to redesign products and expand product lines to increase our level of innovation ahead of our competitors. 21 Selling, general and administrative (“SG&A”) expense.

We expect a moderate increase in R&D expense for 2024 due to engineering salary increases granted effective October 1, 2023 and for continued investment in work on certain initiatives to redesign products and expand product lines to increase our level of innovation ahead of our competitors. Selling, general and administrative (“SG&A”) expense.

The increase in R&D expense in 2022 is related to increases in wages and bonuses paid to our engineering personnel in 2022 and the expenses and materials paid to third-party consultants in the continued development of next-generation PG and CP products and exploration into new possible product lines.

The increase in R&D expense in 2023 is related to increases in wages and bonuses paid to our engineering personnel in 2023 and the expenses and materials paid to third-party consultants in the continued development of next-generation PG and CP products and exploration into potential new product lines.

If we decide to pursue additional financing for OmniMetrix in the future, it may be in the form of a bank line, a new loan or investment by others, an equity raise by Acorn which could then facilitate a loan by Acorn to OmniMetrix, or a combination of the above.

If we decide to pursue additional financing in the future, it may be in the form of a bank line, a new loan or investment by others, an equity raise by Acorn which could then facilitate a loan by Acorn to OmniMetrix, or any combination thereof.

OmniMetrix will continue to make payments to Acorn against this balance as long as OmniMetrix is generating sufficient cash to allow such repayments. This intercompany balance is eliminated in consolidation. We had $1,450,000 of cash on December 31, 2022, and $1,480,000 on March 14, 2023.

OmniMetrix will continue to make payments to Acorn against this balance as long as OmniMetrix is generating sufficient cash to allow such repayments. This intercompany balance is eliminated in consolidation. We had $1,449,000 of cash on December 31, 2023, and $1,236,000 on March 5, 2024 .

In 2022, OmniMetrix recorded total revenue of $7,000,000, as compared to total revenue of $6,776,000 in 2021, for an increase of $224,000 (3%). As previously stated, OmniMetrix has two divisions: PG and CP. The PG segment includes our monitoring device for generators, industrial air compressors and our annunciator products.

In 2023, OmniMetrix recorded total revenue of $8,059,000, as compared to total revenue of $7,000,000 in 2022, for an increase of $1,059,000 (15%). As previously stated, OmniMetrix has two divisions: PG and CP. The PG segment includes our monitoring device for generators, industrial air compressors and our annunciator products.

Net cash decreased during the year ended December 31, 2022 by $272,000, of which $31,000 was provided by operating activities, $308,000 was used in investing activities, and $5,000 was provided by financing activities. During the year ended December 31, 2022, our operating activities provided $31,000 of net cash.

Net cash decreased during the year ended December 31, 2023 by $1,000, of which $72,000 was provided by operating activities, $78,000 was used in investing activities, and $5,000 was provided by financing activities. During the year ended December 31, 2023, our operating activities provided $72,000 of net cash.

OmniMetrix has made monthly payments to Acorn of varying amounts since the second quarter of 2019. In 2022, OmniMetrix made payments to Acorn of $985,000 offset by interest of $179,000, dividends of $76,000 due to Acorn and $190,000 in shared expenses paid by Acorn.

OmniMetrix has made monthly payments to Acorn of varying amounts since the second quarter of 2019. In 2023, OmniMetrix made payments to Acorn of $1,285,000 offset by interest of $164,000, dividends of $76,000 due to Acorn and $25,000 in shared expenses paid by Acorn.

We believe that such cash, plus the cash expected to be generated from operations, will provide sufficient liquidity to finance the operating activities of Acorn and OmniMetrix at their current level of operations for the twelve months from the issuance of these consolidated financial statements in particular.

We believe that such cash, plus the cash expected to be generated from operations, will provide sufficient liquidity to finance the corporate activities of Acorn and the operating activities of OmniMetrix at their current level of operations for at least the twelve-month period from the issuance of the audited consolidated financial statements contained in this Annual Report.

These investments were primarily related to the design of our new Azure cloud server environment, as well as investments in the development of our new user interface for our PG customers and hardware and software upgrades.

These investments were primarily related to the design of our new Azure cloud server environment, as well as investments in the development of OmniView 2.0 and hardware and software upgrades.

Intercompany During 2022, the intercompany amount due to Acorn from OmniMetrix decreased by $540,000. This included repayments of $985,000 offset by interest of $179,000, dividends of $76,000 due to Acorn and $190,000 in shared expenses paid by Acorn. During 2021, the intercompany amount due to Acorn from OmniMetrix decreased by approximately $359,000.

Given that OmniMetrix monitors all major brands of critical equipment and continues to invest in research and development in response to customer and potential customer feedback, OmniMetrix remains well-positioned as a competitive participant in this market to continue to grow its customer base and expand its product offerings.

Gross profit was $5,071,000, reflecting a gross margin of 72% on revenue, in 2022 compared with a gross profit of $4,899,000, also reflecting a 72% gross margin on revenue, in 2021. Gross margin on hardware revenue for the year ended December 31, 2022 was 48% compared to 44% for the year ended December 31, 2021.

Gross profit was $6,004,000, reflecting a gross margin of 74% on revenue, in 2023 compared with a gross profit of $5,071,000, reflecting a 72% gross margin on revenue, in 2022. Gross margin on hardware revenue for the year ended December 31, 2023 was 54% compared to 48% for the year ended December 31, 2022.

This included repayments of approximately $677,000 offset by interest of approximately $194,000, dividends of $76,000 due to Acorn and approximately $48,000 in shared expenses paid by Acorn. We believe that OmniMetrix will not need working capital support in 2023. However, we have no assurance that this will be the case.

This included repayments of $985,000 offset by interest of $179,000, dividends of $76,000 due to Acorn and $190,000 in shared expenses paid by Acorn. This intercompany balance is eliminated in consolidation. We believe that OmniMetrix will not need working capital support in 2024. However, we have no assurance that this will be the case.

We had a net loss attributable to Acorn of $633,000 in 2022 as compared to net loss attributable to Acorn of $21,000 in 2021. Our loss in 2022 is comprised of net income at OmniMetrix of $331,000, corporate expense of $962,000, offset by $2,000 representing the non-controlling interest share of our income in OmniMetrix.

We had net income attributable to Acorn of $119,000 in 2023 compared to net loss attributable to Acorn of $633,000 in 2022. Our income in 2023 is comprised of net income at OmniMetrix of $1,185,000, corporate expense of $1,056,000, offset by $10,000 representing the non-controlling interest share of our income in OmniMetrix.

During the year ended December 31, 2021, we recorded $112,000 in revenue from the sale of custom TG Pro units that were designed to large customer specifications and monitored by the customer; thus, the revenue was not deferred. We did not have any custom unit orders in the year ended December 31, 2022.

Hardware revenue increased $709,000 from $3,088,000 during the year ended December 31, 2022 to $3,797,000 during the year ended December 31, 2023. During the year ended December 31, 2023, we recorded $259,000 in revenue from the sale of custom TG Pro units that were designed to large customer specifications and monitored by the customer; thus, the revenue was not deferred.

In 2022, revenue of $5,894,000 was attributed to the PG segment and revenue of $1,106,000 was attributed to the CP segment, as compared to the 2021 revenue of $5,787,000 that was attributed to the PG segment and $989,000 that was attributed to the CP segment. Increased revenue in PG was due to an increase in hardware revenue.

In 2023, revenue of $7,000,000 was attributed to the PG segment and revenue of $1,059,000 was attributed to the CP segment, as compared to the 2022 revenue of $5,894,000 that was attributed to the PG segment and $1,106,000 that was attributed to the CP segment.

OmniMetrix Following the emergence of machine-to-machine (“M2M”) and IoT applications whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this economic ecosystem.

The following analysis should be read together with the segment information provided in Notes 12 and 13 to our consolidated financial statements included in this report. OmniMetrix Following the emergence of machine-to-machine (“M2M”) and IoT applications whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this economic ecosystem.

Homeowners are compensated for signing up and possibly supplying grid offload by running their generators for up to 12 hours per year. We do not expect this partnership to begin generating revenue until late 2023.

Homeowners are compensated for signing up and possibly supplying grid offload by running their generators for up to 12 hours per year.

We also had an increase in CP hardware revenue of $126,000 (17%) from $728,000 during the year ended December 31, 2021 to $854,000 during the year ended December 31, 2022.

We also had a decrease in CP hardware revenue of $51,000 (6%) to $803,000 during the year ended December 31, 2023 from $854,000 during the year ended December 31, 2022.

OmniMetrix’s SG&A expense increased $610,000 (19%), from $3,235,000 in 2021 to $3,845,000 in 2022.

OmniMetrix’s SG&A expense increased $153,000 (4%), from $3,845,000 in 2022 to $3,998,000 in 2023.

CASH PAYMENTS DUE TO CONTRACTUAL OBLIGATIONS Years Ending December 31, (in thousands) Total 2023 2024-2025 2026-2027 Software agreements $ 32 $ 30 $ 2 $ — Operating leases* 357 128 229 — Contractual services 35 34 1 — Purchase obligations** 255 255 — — Total contractual cash obligations $ 679 $ 447 $ 232 $ — *Reflects the gross amount of the operating lease liabilities.

CASH PAYMENTS DUE TO CONTRACTUAL OBLIGATIONS Years Ending December 31, (in thousands) Total 2024 2025-2026 2027-2028 Software agreements $ 2 $ 2 $ — $ — Operating leases* 229 130 99 — Contractual services 117 65 52 — Purchase obligations** 374 374 — — Total contractual cash obligations $ 722 $ 571 $ 151 $ — *Reflects the gross amount of the operating lease liabilities.

Our OmniMetrix subsidiary provided $916,000 from its operations while our corporate headquarters used $885,000 in its operating activities during the period. OmniMetrix’s inventory balance increased by $172,000 at December 31, 2022 as compared to December 31, 2021, due to our continuing efforts to mitigate the supply chain challenges and have adequate safety stock on hand.

Our OmniMetrix subsidiary provided $1,147,000 from its operations while our corporate headquarters used $1,075,000 in its operating activities during the period. OmniMetrix’s inventory balance increased by $173,000 at December 31, 2023 as compared to December 31, 2022, due to purchase orders placed to have sufficient safety stock on hand for anticipated growth in 2024.

We may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business. Contractual Obligations and Commitments The table below provides information concerning obligations under certain categories of our contractual obligations as of December 31, 2022.

We may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business.

OmniMetrix also offers the industry’s first RAD TM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools which can drastically reduce a company’s expense while increasing employee safety. 16 The following analysis should be read together with the segment information provided in Notes 11 and 12 to our consolidated financial statements included in this report.

The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. OmniMetrix also offers the industry’s first RAD TM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools which can drastically reduce a company’s expense while increasing employee safety.

During the year ended December 31, 2021, our operating activities provided $132,000. Our OmniMetrix subsidiary provided $1,035,000 from its operations while our corporate headquarters used $903,000 in its operating activities during the same period. During the year ended December 31, 2022, net cash of $308,000 was used in investing activities, primarily in our technology infrastructure.

We expect to sell through the excess inventory in 2024. During the year ended December 31, 2022, our operating activities provided $31,000 of net cash. Our OmniMetrix subsidiary provided $916,000 from its operations while our corporate headquarters used $885,000 in its operating activities during the period.

Under the applicable data hosting services agreements, we paid $110,000 and $158,000 in the years ended December 31, 2022 and 2021, respectively. On March 17, 2021, we entered into a master services agreement for the development of a new user interface for our customer data portal.

On March 17, 2021, we entered into a master services agreement for the development of a new user interface for our customer data portal. Prior to deployment on October 1, 2023, we had invested $194,000 in design, development and quality assurance services of the new user interface.

Gross margin on monitoring revenue was 92% for the year ended December 31, 2022 compared to 91% for year ended December 31, 2021. Research and development (“R&D”) expense. During 2022, OmniMetrix recorded $845,000 of R&D expense as compared to $739,000 in 2021, an increase of $106,000 (14%).

Research and development (“R&D”) expense. During 2023, OmniMetrix recorded $875,000 of R&D expense as compared to $845,000 in 2022, an increase of $30,000 (4%).

This increase was primarily due to increases of (i) $248,000 in personnel expenses related to bonuses, promotional wage increases, staff additions and stock compensation expense, (ii) $212,000 in technology expenses related to technology consulting, amortization of technology investments and increased managed services expenses, (iii) $55,000 in sales commissions, (iv) $53,000 in travel related expenses, and (v) $45,000 increase in depreciation related to additional office equipment and computers purchased in 2021 and 2022 and a net decrease of $3,000 in other expense accounts.

This increase was primarily due to increases of (i) $102,000 in personnel expenses related to staff additions, promotions, bonuses and cost of living wage increases, (ii) $101,000 in commission expenses, (iii) $42,000 in depreciation and amortization primarily related to IT assets, (iv) $16,000 in travel and trade show expenses, and offset by a decrease of $107,000 in technology expenses primarily in technology consulting and $1,000 in net aggregate decreases in other expense categories.

Whether Acorn will have the resources necessary to provide funding, or whether alternative funds, such as third-party loans or investments, will be available at the time and on terms acceptable to Acorn and OmniMetrix cannot be determined at this time. Other Liquidity Matters OmniMetrix owes Acorn $3,677,000 for loans, accrued interest and expenses advanced to it by Acorn.

Whether alternative funds, such as third-party loans or investments, will be available at the time required and on terms acceptable to Acorn and OmniMetrix cannot be determined at this time. 22 Contractual Obligations and Commitments The table below provides information concerning obligations under certain categories of our contractual obligations as of December 31, 2023.

Net cash of $324,000 was used in investing activities in 2021 which was also related to the technology investments in which we continued to invest in 2022. 22 Net cash of $5,000 was provided by financing activities during the year ended December 31, 2022 which represents proceeds from the exercise of stock options.

Net cash of $5,000 was provided by financing activities during the years ended December 31, 2023 and 2022 which represents proceeds from the exercise of warrants and proceeds from the exercise of stock options, respectively. Other Liquidity Matters OmniMetrix owes Acorn $2,657,000 for loans, accrued interest, dividends and expenses advanced to it by Acorn.

We have identified the following as critical accounting policies affecting our Company: revenue recognition and stock-based compensation. Revenue Recognition Our revenue recognition policy is consistent with applicable revenue recognition guidance and interpretations.

Management believes our most critical accounting estimates and assumptions are in the area of revenue recognition. 18 Revenue Recognition Our revenue recognition policy is consistent with applicable revenue recognition guidance and interpretations.

PG CP Total Year ended December 31, 2022: Revenues from customers $ 5,894 $ 1,106 $ 7,000 Percentage of total revenues from customers 84 % 16 % 100 % Segment gross profit 4,426 645 5,071 Year ended December 31, 2021: Revenues from customers $ 5,787 $ 989 $ 6,776 Percentage of total revenues from customers 85 % 15 % 100 % Segment gross profit 4,328 571 4,899 2022 COMPARED TO 2021 Revenue.

PG CP Total Year ended December 31, 2023: Revenues from customers $ 7,000 $ 1,059 $ 8,059 Percentage of total revenues by segment 87 % 13 % 100 % Segment gross profit 5,373 631 6,004 Year ended December 31, 2022: Revenues from customers $ 5,894 $ 1,106 $ 7,000 Percentage of total revenues by segment 84 % 16 % 100 % Segment gross profit 4,426 645 5,071 2023 COMPARED TO 2022 For the Years Ended December 31, 2023 2022 (in thousands, except per share data) Revenue $ 8,059 $ 7,000 Cost of sales 2,055 1,929 Gross profit 6,004 5,071 Research and development expenses 875 845 Selling, general and administrative expenses 5,055 4,804 Impairment of software — 51 Operating income (loss) $ 74 $ (629 ) 20 Revenue.

The PG hardware revenue during the year ended December 31, 2021, excluding the revenue from the sale of the custom units, was $1,906,000 compared to $2,234,000 during the year ended December 31, 2022; thus, the increase in PG hardware revenue excluding the custom units was 17%.

The hardware revenue during the years ended December 31, 2023 and 2022 is further detailed in the table below: Reconciliation of Hardware Revenue 2023 2022 Amortization of deferred revenue $ 2,381 $ 2,293 Sales of custom designed units and related accessories 259 — Hardware sales (new product versions) 475 — Other accessories, services, shipping and miscellaneous charges 682 795 Total hardware revenue $ 3,797 $ 3,088 The PG hardware revenue during the year ended December 31, 2022 was $2,234,000 compared to $2,735,000, excluding the sale of custom units, during the year ended December 31, 2023; thus, the increase in PG hardware revenue excluding the custom units was 22%.

Our loss in 2021 is comprised of net income at OmniMetrix of $921,000, corporate expense of $934,000, offset by $8,000 representing the non-controlling interest share of our income in OmniMetrix. LIQUIDITY AND CAPITAL RESOURCES At December 31, 2022, we had a negative working capital of $561,000. Our working capital includes $1,450,000 of cash and deferred revenue of $3,984,000.

Our loss in 2022 is comprised of net income at OmniMetrix of $331,000, corporate expense of $962,000, offset by $2,000 representing the non-controlling interest share of our income in OmniMetrix. The positive change in net income (loss) was due to the increase in gross margin as described above.

Consolidated SG&A expense in 2022 increased by $636,000 (15%), from $4,168,000 in 2021 to $4,804,000 in 2022. Corporate overhead increased by $26,000, from $933,000 in 2021 to $959,000 in 2022, due to increases in audit fees and investor relations expenses offset by a decrease in tax professional fees.

Consolidated SG&A expense in 2023 increased by $251,000 (5%), from $4,804,000 in 2022 to $5,055,000 in 2023. Corporate overhead increased by $98,000 (10%), from $959,000 in 2022 to $1,057,000 in 2023, primarily due to $102,000 in expenses related to the execution of the reverse stock split in 2023.

Removed

The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds.

Added

As of March 5, 2024, Acorn’s corporate operations (excluding cash at our OmniMetrix subsidiary) held a total of $1,236,000 in cash. Other Matters On January 12, 2024, we entered into a new contract with our current primary data provider for Internet of Things (IoT) wireless services for a 36-month contract term with automatic one-year extensions, subject to termination notice.

Removed

As of March 14, 2023, Acorn’s corporate operations (excluding cash at our OmniMetrix subsidiary) held a total of $1,480,000 in cash. Other Matters On March 2, 2023, 35,000 warrants that were set to expire on March 16, 2023 were exercised at an exercise price of $0.13 per share by our Chief Executive Officer.

Added

The pricing structure involves account setup, SIM charges, monthly revenue obligations, and various rate plans based on data usage and regions along with other optional services. The monthly revenue obligation is $10,000 for the first 6 months and $15,000 thereafter. We will also be eligible for volume discounts based on total monthly service revenue.

Removed

On February 27, 2023, 10,000 options in the aggregate were issued to the Director of Software Development and Technology with an exercise price of $0.41 and that vested in equal increments over three years on the anniversary date of the grant, valued at $3,000 in the aggregate.

Added

Additionally, the agreement includes an IoT Enhanced Support and Priority Care Services Rate Plan with various support service types and pricing tiers based on the number of devices and terms for SIM migrations, including tiered pricing and conditions for waiver of certain charges during migration.

Removed

On January 3, 2023, 30,000 options in the aggregate were issued to directors with an exercise price of $0.35 and that vested in equal increments on January 1, 2023, April 1, 2023, July 1, 2023 and October 1, 2023, valued at $9,000 in the aggregate.

Added

This new agreement will allow us to migrate our customers to higher tier data plans for nominal additional cost. On December 22, 2023, we entered into an agreement with a new Azure cloud hosting provider to move to their Cloud Reliability Platform and utilize their premium cloud operations services.

Removed

On January 1, 2023, 35,000 options were issued to the CEO with an exercise price of $0.35 and that vest in equal increments on January 1, 2023, April 1, 2023, July 1, 2023 and October 1, 2023 valued at $9,000.

Added

The initial term of this agreement is twenty-four months with automatic renewal of successive one-year terms unless ninety days written notice is given prior to the expiration of the initial term.

Removed

On November 22, 2022, 10,000 vested options were exercised by a board member with an exercise price of $0.14 per share or $1,400 in the aggregate.

Added

Through this relationship, we will have unparalleled cloud management that provides a central location to access cloud operations metrics, configure services, set up proactive monitoring, create backup policies and request access to certified cloud experts to ensure that our operating infrastructure is healthy, resilient and operating efficiently.

Removed

These options had an expiration date of January 1, 2023. 17 On August 12, 2022, 25,000 vested options were exercised by the CEO with an exercise price of $0.20 per share or $5,000 in the aggregate. These options had an expiration date of August 13, 2022.

Added

We will also have 24 x 7 x 365 monitoring and resolution support to timely resolve any issues that may arise and reduce or potentially eliminate unplanned downtime for our customers on our data monitoring platform, OmniView. We will pay monthly recurring fees of $4,000 plus 115% of actual Azure usage costs.

Removed

On March 4, 2022, 30,770 options were issued to the Vice President of Sales with an exercise price of $0.55 and that vest in equal increments over three years on the anniversary date of the grant. These options are valued at $11,000.

Added

There may also be additional hourly fees from time to time for projects or problem resolution outside the scope of the premium cloud operations services platform. This agreement will replace our current cloud hosting service provider to whom we pay monthly recurring fees of approximately $6,000 plus 100% of actual Azure usage costs.

Removed

On June 1, 2022, 50,000 options were issued to the CFO with an exercise price of $0.44 and vesting in equal increments on June 1, 2022, September 1, 2022, December 1, 2022 and March 1, 2023, valued at $16,000.

Added

On November 7, 2023, we entered into a non-exclusive reseller agreement with one of the nation’s largest commercial generator dealers with regional dealerships throughout the United States.

Removed

On January 1, 2022, 30,000 options in the aggregate were issued to directors with an exercise price of $0.63 and that vested in equal increments on January 1, 2022, April 1, 2022, July 1, 2022 and October 1, 2022, valued at $12,000 in the aggregate.

Added

We believe this agreement could yield 2,500 to 3,000 new monitoring connections per year for OmniMetrix, which could represent hardware sales, start-up fees and monitoring revenue of $1 million to $2 million per year in the aggregate. Importantly, endpoints added from this relationship are expected to make a meaningful contribution to the growth of our base of recurring monitoring revenue.

Removed

On January 1, 2022, 35,000 options were issued to the CEO with an exercise price of $0.63 and that vested in equal increments on January 1, 2022, April 1, 2022, July 1, 2022 and October 1, 2022, valued at $14,000.

Added

We expect initial revenue from this relationship to start in the first quarter of 2024 and to build as the program is rolled out across their dealer network. 17 On October 1, 2023, we deployed our new user interface to our customer data portal and made it available to customers.

Removed

During June 2022, we conducted an evaluation of the status of an ERP software customization project that had been initiated in July 2019 and was ongoing. As a result of this evaluation, we elected to terminate this project effective June 30, 2022 and recorded an impairment against the capitalized investment in this project of $51,000.

Added

Since deployment, our customers have the option to continue to use the “classic view” of our user interface, which is our original user interface, or our new user interface known as “OV2” until March 4, 2024 when we will officially terminate our original user interface. The cost of this project was capitalized, and amortization began as of October 1, 2023.

Removed

On August 19, 2019, we entered into an agreement with a software development partner to create and license to us a new software platform and application. Pursuant to this agreement, we paid this partner equal monthly payments over the first seven months of the term of the agreement equal to $200,000 in the aggregate.

Added

We have continued to implement bug fixes and enhancements to OV2 , for which any related IT costs have been expensed as incurred.

Removed

We will also pay the partner (i) a per-sensor monitoring fee for each sensor connected to the developed technology, or (ii) a percentage of any revenue received above a specified amount per sensor monitored per month, in gas applications only.

Added

On September 5, 2023, the Board of Directors of Acorn approved a Certificate of Amendment to Acorn’s Restated Certificate of Incorporation (the “Certificate of Amendment”) that provided for a 1-for-16 reverse stock split of Acorn’s Common Stock (the “Reverse Stock Split”).

Removed

Commencing on January 1, 2021, we paid the partner a quarterly licensing fee of $12,500 which was renegotiated to $4,450 effective October 1, 2021. The per-sensor monitoring fees have not yet commenced.

Added

Acorn filed the Certificate of Amendment with the Secretary of State of the State of Delaware on September 6, 2023, and the Reverse Stock Split became effective at 5:00 p.m. EDT on September 7, 2023.

Removed

The initial term of this agreement ended on August 19, 2022 and would have automatically renewed for an additional year, but we delivered a written notice of termination to the other party sixty days prior to the end of the initial term.

Added

The Reverse Stock Split increased the market price of Acorn’s Common Stock and makes Acorn’s shares accessible to a broader range of investors, including institutions and those unable to purchase or recommend low-priced stocks.

Removed

We are currently on a month-to-month arrangement paying a monthly licensing fee of $1,500, and are working with the software development partner to negotiate more favorable terms for future periods. We entered into a new agreement effective May 1, 2020 for data hosting services, replacing an expiring agreement with the same vendor. The agreement had a twelve-month term.

Added

At the effective time of the Reverse Stock Split, every sixteen issued and outstanding shares of Acorn’s Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share.

Removed

In January 2021, we elected to renew this agreement for an additional twelve months under the same terms, extending the agreement to April 30, 2022. We did not extend this agreement for an additional one-year term beyond the expiration of the previous term on April 30, 2022 and were under a month-to-month arrangement which we terminated effective September 30, 2022.

Added

Stockholders who would have otherwise been entitled to fractional shares of Common Stock as a result of the Reverse Stock Split received a cash payment in lieu of receiving fractional shares. The value of the fractional shares repurchased was $347 and equated to fifty-eight shares.

Removed

The cost of this project is $126,000 in design and development services ($14,000 was paid at the commencement of this project and three equal installments of $23,000 were paid monthly starting in July 2021 with the fourth and final installment to be paid upon completion and launch of the new interface).

Added

All share and per-share amounts of common stock, options and warrants contained in this Management’s Discussion and Analysis have been restated for all periods to give retroactive effect to the Reverse Stock Split and the related fractional share repurchase for all prior periods presented.

Removed

This project is substantially completed and the launch of the new customer portal is expected to occur in the first half of 2023. We expect to incur additional costs to execute the launch plan for the interface and to develop the corresponding mobile application.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+1 added−7 removed4 unchanged

2022 filing

2023 filing

Biggest changeThe Company’s cash was deposited with a U.S. bank and amounted to $1,450,000 at December 31, 2022. The Company had one customer that represented 12% of its accounts receivable at December 31, 2022. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base.

Biggest changeThe Company’s cash was deposited with a U.S. bank and amounted to $1,449,000 at December 31, 2023. The Company had one customer that represented 25% of its accounts receivable at December 31, 2023. This is a large corporate customer with 90-day payment terms.

The Company does not believe there is significant risk of non-performance by these counterparties. Interest Rate Risk OmniMetrix has no interest rate risk related to debt since the Company paid off our credit line in February 2021.

Interest Rate Risk OmniMetrix has no interest rate risk related to debt since the Company paid off our credit line in February 2021.

Removed

COVID-19 Pandemic Risk to Supply Chain As discussed above under the “RISK FACTORS” heading, the COVID-19 pandemic could substantially interfere with general commercial activity related to our supply chain and customer base, which could have a material adverse effect on our financial condition, results of operations, business, or prospects.

Added

Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base. The Company does not believe the risk of non-performance by these counterparties is significant.

Removed

Some of the electronic devices and hardware we purchase, like antennas, radios, and GPS modules are very specific to our application; and there are not likely to be practical alternatives. In some cases, our circuit boards were designed around specific electronic hardware that met our specifications.

Removed

We continue to work closely with our contract manufacturers and suppliers in order to mitigate, as much as possible, the risks to our supply chain for these critical devices and hardware, including identifying any lead-time issues and any potential alternate sources.

Removed

We also continue to examine all currently open purchase orders in an effort to identify whether we need to issue additional orders to secure product that is critical, already has questionable lead times and/or is unique to our requirements.

Removed

Alternate sources may not be available or may result in delays in shipments to us from our supply chain and subsequently to our customers, each of which would affect our results of operations.

Removed

Further, if our customers’ businesses are similarly affected as a result of the pandemic, they might delay or reduce purchases from us, which could adversely affect our results of operations. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Furnished at the end of this report commencing on page F-1. ITEM 9.

Removed

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

Top changes in ACORN ENERGY, INC.'s 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other ACFN 10-K year-over-year comparisons