What changed in ACORN ENERGY, INC.'s 2024 10-K compared to 2023?

Across the narrative sections we track, ACORN ENERGY, INC. (ACFN) added 163 paragraphs, removed 203, and edited 125 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+69/−85), Item 1A. Risk Factors (+48/−74), Item 1. Business (+34/−33).

Did ACORN ENERGY, INC. add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 48 new/edited paragraphs and 74 removed paragraphs versus the 2023 10-K.

What changed in ACORN ENERGY, INC.'s MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 69 new/edited paragraphs and 85 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did ACORN ENERGY, INC. update its Cybersecurity disclosure (Item 1C) in 2024?

Item 1C Cybersecurity has 4 paragraph-level changes between the 2023 and 2024 filings.

Where does this ACFN 10-K diff come from?

The source filings are ACORN ENERGY, INC.'s official 2023 and 2024 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 — 2023 vs 2024

Paragraph-level year-over-year comparison of ACORN ENERGY, INC.'s 2023 and 2024 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 2024 report.

+163 added−203 removedSource: 10-K (2025-03-06) vs 10-K (2024-03-07)

Top changes in ACORN ENERGY, INC.'s 2024 10-K

163 paragraphs added · 203 removed · 125 edited across 6 sections

Item 7. Management's Discussion & Analysis+69 / −85 · 42 edited
Item 1A. Risk Factors+48 / −74 · 45 edited
Item 1. Business+34 / −33 · 28 edited
Item 2. Properties+6 / −6 · 5 edited
Item 1C. Cybersecurity+4 / −3 · 3 edited

Item 1. Business

Business — how the company describes what it does

28 edited+6 added−5 removed23 unchanged

2023 filing

2024 filing

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).

Biggest changeYear ended December 31, 2024 OmniMetrix Acorn Total Revenues $ 10,986 $ — $ 10,986 Cost of goods sold (COGS) 2,987 — 2,987 Gross profit 7,999 — 7,999 Gross profit margin 73 % 73 % Research and development (R&D) expense 1,012 — 1,012 Selling, general and administrative (SG&A) expense 4,030 1,020 5,050 Operating income (loss) $ 2,957 $ (1,020 ) $ 1,937 Year ended December 31, 2023 OmniMetrix Acorn Total Revenues $ 8,059 $ — $ 8,059 COGS 2,055 — 2,055 Gross profit 6,004 — 6,004 Gross profit margin 74 % 74 % R&D expense 875 — 875 SG&A expense 3,998 1,057 5,055 Operating income (loss) $ 1,131 $ (1,057 ) $ 74 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 dealers benefit from the receipt of performance data and status conditions from the generators they service for their customers, which allows the dealer service organization to be proactive in their delivery of service to their customers, as well as analyzing the remote machines before dispatching a service truck.

The dealers benefit from the receipt of performance data and status conditions from the generators they service for their customers, which allows the dealer service organization to be proactive in their delivery of service to their customers, as well as in analyzing the remote machines before dispatching a service truck.

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.

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 commercial and industrial segments from residential due, in part, to the ability to customize our products to the customers’ specifications.

We have also increased our marketing efforts to end-users in an effort to increase demand for our services. These efforts have proven to be successful, and OmniMetrix continues to execute on that strategy. Competition OmniMetrix is a vertical market company, deeply focused on providing excellent customer experience and product and service designs for a complete end-to-end program for its customers.

We have also increased our marketing efforts to end users in an effort to increase demand for our services. These efforts have proven to be successful, and OmniMetrix continues to execute that strategy. Competition OmniMetrix is a vertical market company, deeply focused on providing excellent customer experience and product and service designs for a complete end-to-end program for its customers.

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.

These enhanced control panels allowed the service organization to put the right person in the right truck with appropriate 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 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.

Since the majority of service and warranty costs are incurred by the service providers, preemptive analysis of customer site conditions prior to dispatch can significantly 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.

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.

They are also generally designed for the machine owners’ use, in a reactive application, similar to lower-performance, lower-priced market competitors. 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’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.

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 dealer service organizations as well as to the machine owner.

As the name suggests, the Hero 2 Rectifier Monitor product monitors and controls the operation of the rectifiers, which are a critical component in the effort to prevent corrosion and are also the most common point of failure in the pipeline system.

As the name suggests, the Hero 2 Rectifier product monitors and controls the operation of the rectifiers, which are a critical component in the effort to prevent corrosion and are also the most common point of failure in the pipeline system.

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.

Service providers 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.

Standby generator monitoring is part of the IoT ecosystem, whereby multiple sensing and monitoring devices are aggregated into one simple dashboard for customers. As OmniMetrix can monitor and control all major brands of standby generators, it is well-positioned to compete in this market.

Standby generator monitoring is part of the IoT ecosystem, whereby multiple sensing and monitoring devices are aggregated into one simple dashboard for customers. 4 As OmniMetrix can monitor and control all major brands of standby generators and continues to innovate, it is well-positioned to compete in this market.

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.

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.

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.

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.

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

(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.

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 customer applications like the OmniMetrix products that service all brands.

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.

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.

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.

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.

In the early stages of OmniMetrix’s PG product and market development, relatively unsophisticated generator controls and early generation cellular and satellite communication processes limited the applications to alarm delivery. Customers were notified that some event had taken place after the fact.

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.

See discussion under Results of Operations under Item 7 below. 6 R&D Expense, Net R&D expense recorded for the years ended December 31, 2024 and 2023 for our OmniMetrix subsidiary is as follows (amounts in thousands of U.S. dollars): Years ended December 31, 2024 2023 OmniMetrix $ 1,012 $ 875 Employees At December 31, 2024, we had a total of 26 employees (all of whom were employed in the United States by OmniMetrix), of whom 25 were full-time and one was part-time.

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.

While the execution of our aggressive sales strategy was interrupted by the impact of COVID-19, the Company subsequently resumed its comprehensive marketing efforts, developing more sophisticated, diagnostic products and custom solutions for commercial and industrial clientele and pursuing the market segment that requires less technology and lower price points (the extremely large and growing residential generator market).

Nonetheless, OmniMetrix has four issued valid patents. Furthermore, the Company has agreements with its employees and consultants which establish certain non-disclosure and, in some cases, non-compete, requirements. OmniMetrix continually evaluates whether and how to best protect its intellectual property, but there can be no assurance that its efforts will be successful in all cases.

Nonetheless, OmniMetrix has four valid patents issued. OmniMetrix continually evaluates whether and how to best protect its intellectual property, but there can be no assurance that its efforts will be successful in all cases.

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.

OmniMetrix is now focused on expanding its product offerings while also executing the development and launch of new advanced versions of its existing power generation monitoring products. This includes maturing the high-performance data collection design point into the first provider offering of automated prognostic solutions.

Having been the first provider of wireless remote monitoring systems for standby generators, the company has had the opportunity to mature its offering to a level not offered by others who compete in our two segments. This long experience working with key brand and project partners over the years has resulted in product offerings that are highly competitive.

Having been the first provider of wireless remote monitoring systems for standby generators, the Company has had the opportunity to mature its offering to a level not offered by others who compete in our two segments.

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.

Thirteen of OmniMetrix’s 26 employees are engaged in production, engineering and technical support, eight in marketing and sales and five in finance and IT. We consider our relationship with our employees to be positive. We have no collective bargaining agreements with any of our employees.

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.

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.

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.

Backlog As of December 31, 2024, OmniMetrix had a backlog of $4.2 million, primarily comprised of deferred revenue, of which $3.5 million is expected to be recognized as revenue in 2025. This compares to a backlog of $5.6 million at December 31, 2023.

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.

Aside from OmniMetrix, such companies include Ayantra, FleetZOOM, Gen-Tracker, and PowerTelematics in the high-performance power generation monitoring segment. Other competitors operate in the reactive “failure notification” mode described in the early stages of the OmniMetrix business model.

Removed

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.

Added

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

Removed

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.

Added

OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on 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.

Removed

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

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 2024, each of our PG and CP activities represented a reportable segment.

Removed

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

This long experience working with key brand and project partners over the years has resulted in product offerings that are highly competitive. 5 There are two types of competitors in the PG marketplace: (1) Independent monitoring organizations produce monitoring systems, but not the equipment being monitored.

Removed

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

Added

The sublease commenced on October 1, 2021 and also continues through September 30, 2025. We are currently considering new office space while also discussing potential renewal terms with our landlord.

Added

Since September 1, 2023, OmniMetrix recognizes revenue, COGS and commissions from the sale of the new version of its hardware products sold when the product is shipped rather than over the estimated time that the unit is in service for the customer which is the reason for the decrease in the backlog.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

45 edited+3 added−29 removed35 unchanged

2023 filing

2024 filing

Biggest changeFor 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.

Biggest changeAs 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. 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.

A significant breakdown, invasion, corruption, destruction or interruption of critical information technology systems or infrastructure, by our workforce, others with authorized access to our systems or unauthorized persons could negatively impact operations.

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.

We have invested in appropriate industry 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.

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.

While we have purchased cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any losses incurred. 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.

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.

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. 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.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls can be circumvented by the individual acts of some people, by the collusion of two or more people, or by management override of the controls.

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.

We have reported material weaknesses in internal controls over financial reporting as of December 31, 2024 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.

Trading on the OTCQB marketplace as opposed to a national securities exchange has resulted, and may continue to result, in a reduction in some or all of the following, each of which could have a material adverse effect on the price of our common stock and our company: ● the liquidity of our common stock; ● the market price of shares of our common stock; ● our ability to obtain financing for the continuation of our operations; ● the number of institutional and other investors that will consider investing in shares of our common stock; ● the number of market markers in shares of our common stock; ● the availability of information concerning the trading prices and volume of shares of our common stock; and ● the number of broker-dealers willing to execute trades in shares of our common stock.

Trading on the OTCQB marketplace as opposed to a national securities exchange has resulted, and may continue to result, in a reduction in some or all of the following, each of which could have a material adverse effect on the price of our common stock and our company: ● the liquidity of our common stock; ● the market price of shares of our common stock; ● our ability to obtain financing for the continuation of our operations; ● the number of institutional and other investors that will consider investing in shares of our common stock; ● the number of market markers in shares of our common stock; and ● the number of broker-dealers willing to execute trades in shares of our common stock.

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.

Any failure to effectively integrate any future acquisitions 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.

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.

General Factors 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 21.07% of the Company’s stock, and Tracy Clifford, CFO of Acorn and COO of OmniMetrix.

OmniMetrix sells on-going monitoring services to both PG and CP customers. It is therefore dependent on these customers continuing to timely pay service fees on an on-going basis. If a significant portion of these fees are not paid on a timely basis and/or are not renewed from year-to-year, OmniMetrix could expect to experience deterioration in its financial condition.

It is therefore dependent on these customers continuing to timely pay service fees on an on-going basis. If a significant portion of these fees are not paid on a timely basis and/or are not renewed from year-to-year, OmniMetrix could expect to experience deterioration in its financial condition.

Accordingly, we may need to raise additional amounts to finance our operations. If we were to do so by selling shares of our common stock and/or other securities convertible into shares of our common stock, current investors may incur dilution in the value of their shares. ITEM 1B. UNRESOLVED STAFF COMMENTS None.

Product liability claims can be expensive to defend and can divert the attention of management and other personnel for significant periods, regardless of the ultimate outcome. Claims of this nature could also have a negative impact on customer confidence in our products and our company.

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.

In addition to the options noted above, at March 4, 2025, there were 8,960 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 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.

As of March 4, 2025, we had consolidated cash of $2,800,000 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.

If we have an increase in our non-renewal rate, we will have to acquire new customers on an ongoing basis just to maintain our existing level of customers and revenues. As a result, marketing expenditures are an ongoing requirement of our business. We incur costs to acquire new customers, and those costs are a factor in determining our net profitability.

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.

See “Risks Related to Our Securities” below. 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.

These providers generally do not warrantee their services to either OmniMetrix or the end users, and any dropped transmissions could result in the loss of customer renewals and potential claims against OmniMetrix. There is no assurance that customers will not cancel monitoring services due to network issues.

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 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.

As of that date, we had 68,089 options outstanding and exercisable with a weighted average exercise price of $6.80 per share, which if exercised would result in the issuance of additional shares of our common stock.

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. 11 OmniMetrix sells equipment and services which monitor third-party products; thus its revenues are dependent on the continued sales of such third-party products.

Many of OmniMetrix’s existing products may require ongoing engineering and upgrades in conjunction with market developments as well as specific customer needs. There can be no assurance that OmniMetrix will continue to be successful in its engineering efforts regarding the development of its products, and future technological difficulties could adversely affect its business, results of operations and financial condition.

There can be no assurance that OmniMetrix will continue to be successful in its engineering efforts regarding the development of its products, and future technological difficulties could adversely affect its business, results of operations and financial condition.

Although we do not believe there is significant risk of non-performance by these counterparties, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition.

Although we do not believe there is a significant risk of non-performance by this customer, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition. 10 We are dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity breaches and data leakage.

Our failure to obtain such insurance could lead to uninsured losses that could have a material adverse effect on our results of operations or financial condition or cause us to be out of compliance with our contractual obligations.

There can be no assurance that we can secure all necessary or appropriate insurance at affordable prices for the required limits. Our failure to obtain such insurance could lead to uninsured losses that could have a material adverse effect on our results of operations or financial condition or cause us to be out of compliance with our contractual obligations.

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. 9 If we are unable to protect our intellectual property, or our intellectual property protection efforts are unsuccessful, others may duplicate our technology.

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. 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.

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. 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.

OmniMetrix sells equipment and services which monitor third-party products, thus its revenues are dependent on the continued sales of such third-party products. OmniMetrix’s end-user customer base is comprised exclusively of parties who have chosen to purchase either generators or construct gas pipelines. OmniMetrix has no ability to control the rate at which new generators or cathodic protection systems are acquired.

OmniMetrix’s end-user customer base is comprised exclusively of parties who have chosen to purchase either generators or construct gas pipelines. OmniMetrix has no ability to control the rate at which new generators or cathodic protection systems are acquired. If purchases of such products decline, the associated need for OmniMetrix’s products and services would be expected to decline as well.

We rely, to a significant degree, on contractual provisions to protect our trade secrets and proprietary knowledge. These trade secrets either cannot be protected by patent protection or we have determined that seeking a patent is not in our interest. These agreements may be breached, and we may not have adequate remedies for any breach.

These trade secrets either cannot be protected by patent protection, or we have determined that seeking a patent is not in our interest. These agreements may be breached, and we may not have adequate remedies for any breach. Our trade secrets may also be known without breach of such agreements or may be independently developed by competitors.

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.

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.

In those territories where we do not have the benefit of patent or trademark protections, our competitors may be able to prevent us from selling our products or otherwise limit our ability to advertise under our established product names and we may face risks associated with infringement litigation as discussed below.

In those territories where we do not have the benefit of patent or trademark protections, our competitors may be able to prevent us from selling our products or otherwise limit our ability to advertise under our established product names. We rely, to a significant degree, on contractual provisions to protect our trade secrets and proprietary knowledge.

We could incur substantial costs in prosecuting patent and other intellectual property infringement suits and defending the validity of our patents and other intellectual property. While we have attempted to safeguard and maintain our property rights, we do not know whether we have been or will be completely successful in doing so.

While we have attempted to safeguard and maintain our property rights, we do not know whether we have been or will be completely successful in doing so.

Any interruption of OmniMetrix’s information technology systems could result in decreased revenue, increased expenses, increased capital expenditures, customer dissatisfaction and potential lawsuits, any of which could have a material adverse effect on its results of operations and financial condition. 12 Risks Related to Our Securities Our stock price is highly volatile, and we do not expect to pay dividends on shares of our common stock for the foreseeable future.

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.

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. OmniMetrix sells on-going monitoring services to both PG and CP customers.

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

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.

Our trade secrets may also be known without breach of such agreements or may be independently developed by competitors. It can be difficult or expensive to obtain the insurance we need for our business operations. As part of our business operations, we maintain insurance as a corporate risk management strategy.

It can be difficult or expensive to obtain the insurance we need for our business operations. As part of our business operations, we maintain insurance as a corporate risk management strategy. Insurance products are impacted by market fluctuations and can become expensive and sometimes very difficult to obtain.

If purchases of such products decline, the associated need for OmniMetrix’s products and services would be expected to decline as well. If OmniMetrix is unable to keep pace with changing market or customer-mandated product and service improvements, OmniMetrix’s results of operations and financial condition may suffer.

If OmniMetrix is unable to keep pace with changing markets or customer-mandated product and service improvements, OmniMetrix’s results of operations and financial condition may suffer. Many of OmniMetrix’s existing products may require ongoing engineering and upgrades in conjunction with market developments as well as specific customer needs.

An increase in customer terminations would negatively affect our business by reducing OmniMetrix’s revenue or requiring us to spend more money to grow our customer base. Non-renewals or other monitoring service terminations could increase in the future due to customer dissatisfaction with our products and services, increased competition from other providers or alternative technologies.

Although our historical renewal rate is greater than 90%, non-renewals or other monitoring service terminations could increase in the future due to customer dissatisfaction with our products and services, increased competition from other providers or alternative technologies.

If we fail to attract or retain highly qualified technical and managerial personnel in the future, our business could be disrupted. There is a limited trading market for our common stock and the price of our common stock may be volatile.

There is a limited trading market for our common stock and the price of our common stock may be volatile.

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 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.

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.

Investors may never obtain a return on their investment. 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 2024, our common stock traded at prices as low as $5.76 and as high as $19.35 per share.

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.

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. Accordingly, investors will need to rely on sales of their common stock after price appreciation, which may never occur, in order to realize a return on their investment.

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.

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 An increase in customer terminations would negatively affect our business by reducing OmniMetrix’s revenue or requiring us to spend more money to grow our customer base.

Although most of our significant employees are bound by confidentiality and non-competition agreements, the enforceability of such agreements cannot be assured. Our future success also depends on our continuing ability to identify, hire, train and retain other highly qualified technical and managerial personnel.

Our future success also depends on our continuing ability to identify, hire, train and retain other highly qualified technical and managerial personnel. If we fail to attract or retain highly qualified technical and managerial personnel in the future, our business could be disrupted.

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.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, which represented 61% of the accounts receivable at December 31, 2024 of which 53% was collected as of March 4, 2025 . Typically, credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising our customer base.

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.

The ability of others to use our intellectual property could allow them to duplicate the benefits of our products and reduce our competitive advantage. We could incur substantial costs in prosecuting patent and other intellectual property infringement suits and defending the validity of our patents and other intellectual property.

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GENERAL FACTORS We have a history of operating losses and have used significant amounts of cash for operations and to fund our investments.

Added

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 $2,326,000 at December 31, 2024. We had one customer, the party to the Material Contract, as defined below under Other Matters in Item 7.

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Although we have had several consecutive quarters of profitability at our OmniMetrix subsidiary, we have had a history of losses from our OmniMetrix subsidiary plus corporate overhead and have used significant amounts of cash to fund our operating activities over the years.

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However, at December 31, 2024, the balance of accounts receivable under the Material Contract was the majority of the outstanding balance of accounts receivable.

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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.

Added

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 4, 2025, 2,491,130 shares of our common stock were issued and outstanding.

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Quotes for stocks included on the OTCQB are not listed in the financial sections of newspapers as are those for the NASDAQ Stock Market or the NYSE. Therefore, prices for securities traded solely on the OTCQB may be difficult to obtain.

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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.

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These rules and regulations have already increased our legal and financial compliance costs and the amount of time and effort we devote to compliance activities. We expect that as a result of continued compliance with these rules and regulations, we will continue to incur significant legal and financial compliance costs.

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We continue to regularly monitor and evaluate developments with respect to these new rules with our legal counsel, but we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. We may in the future become involved in litigation that may materially adversely affect us.

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From time to time in the ordinary course of our business, we may become involved in various legal proceedings, including commercial, product liability, employment, class action and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. Any legal proceedings can be time-consuming, divert management’s attention and resources and cause us to incur significant expenses.

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Because litigation is inherently unpredictable, the results of any such actions may have a material adverse effect on our business, operations or financial condition.

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In the future, should we apply for new patents, we do not know whether any of our pending patent applications will be issued or, in the case of patents issued, that the claims allowed are or will be sufficiently broad to protect our technology or processes.

Removed

Further, a patent issued covering one use of our technology may not be broad enough to cover uses of that technology in other business areas.

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Even if all our patent applications are issued and are sufficiently broad, they may be challenged or invalidated, or our competitors may independently develop or patent technologies or processes that are equivalent or superior to ours.

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Insurance products are impacted by market fluctuations and can become expensive and sometimes very difficult to obtain. There can be no assurance that we can secure all necessary or appropriate insurance at affordable prices for the required limits.

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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.

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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.

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We are dependent on information technology and our systems and infrastructure face certain risks, including from cybersecurity breaches and data leakage.

Removed

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.

Removed

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.

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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.

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We incur significant costs to acquire new customers, and those costs are an important factor in determining our net profitability.

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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.

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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.

Removed

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.

Removed

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.

Removed

While OmniMetrix uses contractual measures to limit its liability to customers, there is no assurance that such limitations will be enforced or that customers will not cancel monitoring services due to network issues.

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RISKS RELATED TO OUR SECURITIES Our stock price is highly volatile and we do not expect to pay dividends on shares of our common stock for the foreseeable future. Investors may never obtain a return on their investment.

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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.

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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.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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2023 filing

2024 filing

Biggest changeAs part of this oversight, the Company established a Cybersecurity Steering Committee consisting of certain members of our senior management team and a Board representative, that meets quarterly and updates the Board periodically, and at least annually, on our cybersecurity program, including with respect to particular cybersecurity threats, cybersecurity incidents, new developments in our risk profile, the status of projects to strengthen our cybersecurity systems, assessments of our cybersecurity program, and the emerging threat landscape. 14 Management has the responsibility to manage risk and bring to the Board’s attention any material near-term and long-term risks to the Company, including risks from cybersecurity threats.

Our Cybersecurity Steering Committee has developed a standard operating procedure that outlines specific steps to identify, mitigate and report on any cybersecurity-related incidents that may be discovered. Although we did not experience a material cybersecurity incident during the year ended December 31, 2023, the scope and impact of any future incident cannot be predicted. See “Item 1A.

Our Cybersecurity Steering Committee has developed a standard operating procedure that outlines specific steps to identify, mitigate and report on any cybersecurity-related incidents that may be discovered. Although we did not experience a material cybersecurity incident during the year ended December 31, 2024, the scope and impact of any future incident cannot be predicted. See “Item 1A.

Cybersecurity is an important and integrated part of our enterprise risk management function that identifies, monitors and mitigates business, operational and legal risks.

Cybersecurity is an important and integral part of our enterprise risk management function that identifies, monitors and mitigates business, operational and legal risks.

Added

Management has the responsibility to manage risk and bring to the Board’s attention any material near-term and long-term risks to the Company, including risks from cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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2023 filing

2024 filing

Biggest changeITEM 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.

Biggest changeITEM 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. We are currently considering new office space while also discussing potential renewal terms with our 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.

The estimated amount the Company expects to remit to the landlord each year of the sublease subsequent to December 31, 2024 is $7,000 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.

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

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): Year ended December 31, 2025 2025 $ 22,000 Total undiscounted cash flows $ 22,000 ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

On 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.

If we renew this lease, we expect to grow into a portion of the currently unused space. 14 On 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 2024 was $2,465), which includes the base rent plus a pro-rata share of utilities, property taxes and insurance.

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.

As of December 31, 2024, after the offset of the investment in leasehold improvements and other expenses related to the sublease, the Company has paid its landlord $16,000 for its share of the sublease profit since the lease commencement.

Removed

OmniMetrix is currently utilizing only a portion of these leased facilities and expects to grow into a portion of the currently unused space.

Added

The annual total rent payment was $129,000 in 2024 and $128,000 in 2023. For 2025, the annual total rent payment will be $98,000 for the period through September 30, 2025. OmniMetrix is currently utilizing only a portion of these leased facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2024 filing

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.

Biggest changeHolders As of March 4, 2025, the last reported sales price of our common stock on the OTCQB marketplace was $16.34, there were 61 record holders of our common stock, and we estimate that there were approximately 2,500 beneficial owners of our common stock. ITEM 6. [RESERVED.]

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

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2023 filing

2024 filing

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.

Biggest changeSelected Consolidated Statement of Operations Data: For the Years Ended December 31, 2024 2023 (in thousands, except per share data) Revenue $ 10,986 $ 8,059 COGS 2,987 2,055 Gross profit 7,999 6,004 R&D expense 1,012 875 SG&A expense 5,050 5,055 Operating income 1,937 74 Interest income, net 73 64 Income before income taxes 2,010 138 Current state tax expense (123 ) (9 ) Deferred income tax benefit 4,435 — Net income after income taxes 6,322 129 Non-controlling interest share of income (28 ) (10 ) Net income attributable to Acorn Energy, Inc. stockholders $ 6,294 $ 119 Basic and diluted net income per share attributable to Acorn Energy, Inc. stockholders: Net income per share attributable to Acorn Energy, Inc. stockholders – basic $ 2.53 $ 0.05 Net income per share attributable to Acorn Energy, Inc. stockholders – diluted $ 2.51 $ 0.05 Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic 2,487 2,484 Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – diluted 2,512 2,503 18 The following table sets forth certain information with respect to revenues and profits of our reportable business segments for the years ended December 31, 2024 and 2023 (dollars in thousands), including the percentages of revenues attributable to such segments.

The remaining balance of deferred revenue from the prior version of these products will continue to be amortized each period until it is fully amortized. Modifications were made to the circuit boards and embedded firmware of hardware enclosures in stock as of August 31, 2023, such that only the new versions of these products were sold subsequent to this date.

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.

Additionally, the agreement includes an IoT Enhanced Support and a 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.

OmniMetrix’s prior hardware product version could not function as a distinct product from its monitoring services. This new version’s functionality results in OmniMetrix’s hardware and monitoring services being capable of being two distinct products and services.

OmniMetrix’s prior hardware product version could not function as a distinct product independent from its monitoring services. This new version’s functionality results in OmniMetrix’s hardware and monitoring services being capable of being two distinct products and services.

OmniMetrix recognizes revenue, COGS and commissions from the sale of the new version of its hardware products sold when the product is shipped rather than over the estimated time that the unit is in service for the customer. Monitoring revenue continues to be deferred and amortized over the period that the monitoring services are rendered.

OmniMetrix, therefore, recognizes revenue, COGS and commissions from the sale of the new version of its hardware products when the product is shipped rather than over the estimated time that the unit is in service for the customer. Monitoring revenue continues to be deferred and amortized over the period that the monitoring services are rendered.

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.

The increase in R&D expense in 2024 is related to increases in wages and bonuses paid to our engineering personnel in 2024 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.

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.

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. Contractual Obligations and Commitments The table below provides information concerning obligations under certain categories of our contractual obligations as of December 31, 2024.

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.

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 was $10,000 for the first 6 months and is $15,000 thereafter. We are also eligible for volume discounts based on total monthly service revenue.

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.

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: ● Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment.

Total deferred revenue decreased by $587,000, from $6,171,000 at December 31, 2022 to $5,584,000 at December 31, 2023, as a result of the sales mix of products sold. Based on the current products being sold, the Company expects continued decreases in the deferred revenue balance in the foreseeable future.

Total deferred revenue decreased by $1,351,000, from $5,584,000 at December 31, 2023 to $4,233,000 at December 31, 2024, as a result of the sales mix of products sold. Based on the current products being sold, the Company expects continued decreases in the deferred revenue balance in the foreseeable future.

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.

In 2024, OmniMetrix recorded total revenue of $10,986,000, as compared to total revenue of $8,059,000 in 2023, for an increase of $2,927,000 (36%). 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.

We anticipate that our annual SG&A costs in 2024 will increase by approximately 15% due to increasing wage and benefit expenses as a result of merit increases, promotions and hiring a higher level skill set in certain roles in 2023 as well as other inflationary increases in other operational costs. Finance income/expense, net.

We anticipate that our annual SG&A costs in 2025 will increase by approximately 6% due to increasing wage and benefit expenses as a result of merit increases, promotions and hiring a higher-level skill set in certain roles in 2024. Interest income, net.

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.

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. 16 Intercompany During 2023, the intercompany amount due to Acorn from OmniMetrix decreased by $1,020,000.

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.

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.

We expect a moderate increase in R&D expense for 2025 due to the hiring of another senior level engineer, as well as engineering salary increases granted effective October 1, 2024, 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. SG&A expense.

LIQUIDITY AND CAPITAL RESOURCES At December 31, 2023, we had a negative working capital of $571,000. Our working capital includes $1,449,000 of cash and deferred revenue of $4,034,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized.

Liquidity and Capital Resources At December 31, 2024, we had working capital of $1,115,000. Our working capital includes $2,326,000 of cash and deferred revenue of $3,521,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized.

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.

Imputed interest is $1,000 resulting in $98,000 included in current liabilities. 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.

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.

In 2024, revenue of $9,882,000 was attributed to the PG segment and revenue of $1,104,000 was attributed to the CP segment, as compared to the 2023 revenue of $7,000,000 that was attributed to the PG segment and $1,059,000 that was attributed to the CP segment.

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.

Net cash increased during the year ended December 31, 2024 by $877,000, of which $905,000 was provided by operating activities, $56,000 was used in investing activities, and $28,000 was provided by financing activities. During the year ended December 31, 2024, our operating activities provided $905,000 of net cash.

Interest income in the year ended December 31, 2023 was $67,000 due to high interest rates on cash balances offset by interest expense of $3,000, compared to interest expense of $2,000 in 2022. The interest expense is primarily related to insurance financing arrangements. 21 Income tax expense.

Interest income in the year ended December 31, 2024 was $74,000 due to high interest rates on cash balances offset by interest expense of $1,000, compared to interest income in the year ended December 31, 2023 of $67,000 offset by interest expense of $3,000. Income taxes.

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.

Hardware sales under the Material Contract represented 63% of the 86% increase. We also had an increase in CP hardware revenue of $51,000 (6%) to $854,000 during the year ended December 31, 2024 from $803,000 during the year ended December 31, 2023.

We believe, given current facts and circumstances, that our estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates and estimates may vary as new facts and circumstances arise.

Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates and estimates may vary as new facts and circumstances arise.

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

OmniMetrix’s SG&A expense increased $32,000 (0.8%), from $3,998,000 in 2023 to $4,030,000 in 2024.

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.

On January 12, 2024, we entered into a new service contract with our current primary data provider for Internet of Things (IoT) wireless services over a 36-month term with automatic one-year extensions, subject to termination notice.

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%.

The hardware revenue during the years ended December 31, 2024 and 2023 is further detailed in the table below: Reconciliation of Hardware Revenue 2024 2023 Amortization of deferred revenue $ 1,841 $ 2,381 Sales of custom designed units and related accessories 26 259 Hardware sales under the Material Contract 1,637 — Hardware sales (new product versions) 2,378 475 Other accessories, services, shipping and miscellaneous charges 551 682 Total hardware revenue $ 6,433 $ 3,797 PG hardware revenue increased $2,585,000 (86%) during the year ended December 31, 2024 to $5,579,000 compared to $2,994,000 during the year ended December 31, 2023.

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.

Cash Payments Due to Contractual Obligations Years Ending December 31, (in thousands) Total 2025 2026-2027 2028-2029 Software agreements $ 20 $ 20 $ — $ — Operating leases* 99 99 — — Contractual services 443 233 210 — Purchase obligations** 603 603 — — Total contractual cash obligations $ 1,165 $ 955 $ 210 $ — *Reflects the gross amount of the operating lease liabilities.

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.

This increase was primarily due to increases of $251,000 in commission expenses and $100,000 in IT consulting and staff augmentation fees offset by decreases in (i) personnel expenses of $153,000, which was due to the elimination of the vice president of sales position offset by increases related to staff additions, promotions, bonuses and cost of living wage increases, (ii) $69,000 in travel and trade show expenses, (iii) $46,000 in other consulting and contract labor expenses, (iv) $39,000 in depreciation and amortization primarily related to IT assets and (v) $12,000 in net aggregate decreases in other expense categories.

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.

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. The positive change in net income was due to the increase in gross profit as a result of the Material Contract while managing SG&A expenses as described above.

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.

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.

Our OmniMetrix subsidiary provided $1,147,000 from its operations while our corporate headquarters spent $1,075,000 in its operating activities during the period. 20 During the year ended December 31, 2024, net cash of $56,000 was used in investing activities, primarily related to the continued investment in our technology infrastructure.

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.

Our OmniMetrix subsidiary provided $1,991,000 from its operations while our corporate headquarters used $1,086,000 in its operating activities during the period. OmniMetrix’s inventory balance decreased by $514,000 at December 31, 2024 as compared to December 31, 2023 due to inventory shipped under the Material Contract and selling through safety stock to return to pre-COVID par inventory levels.

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.

During the year ended December 31, 2023, net cash of $78,000 was used in investing activities. Net cash of $28,000 and $5,000 was provided by financing activities during the years ended December 31, 2024 and 2023, respectively, which represents proceeds from the exercise of stock options and warrants.

Critical Accounting Estimates In preparing the financial statements, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported. These estimates can also affect our supplemental information disclosures, including information about contingencies, risk and financial condition.

This agreement will allow us to migrate our customers to higher tier data plans for nominal additional cost. Critical Accounting Estimates In preparing the financial statements, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported.

The increase in total hardware revenue was due to the sale of custom PG units (as noted above) and increased sales of other PG products as well as from installation income realized, offset by a decrease in revenue from Hero products in the CP segment.

The increase in total hardware revenue was due to recognition of sales revenue from the Material Contract as well as increased sales of other PG products, offset by a decrease in service revenue and custom designed units. Monitoring revenue increased $291,000 (7%) from $4,262,000 in the year ended December 31, 2023 to $4,553,000 in the year ended December 31, 2024.

Monitoring revenue increased $350,000 (9%) from $3,912,000 in the year ended December 31, 2022 to $4,262,000 in the year ended December 31, 2023. The increase in monitoring revenue was due to an increase in the number of connections being monitored and growth in our c ustomer base. Gross profit .

The increase in monitoring revenue was due to an increase in the number of connections being monitored and growth in our c ustomer base. Gross profit . Gross profit was $7,999,000, reflecting a 73% gross margin on revenue, in 2024 compared with a gross profit of $6,004,000, reflecting a 74% gross margin on revenue, in 2023.

The increase in gross margin was due to a higher gross margin realized in 2023 on a large volume of sales to two large commercial customers to whom there were no sales in 2022. Gross margin on monitoring revenue was 93% for the year ended December 31, 2023 compared to 92% for year ended December 31, 2022.

The gross margin was a percentage point lower in 2024 due to a greater volume of hardware sales which have a lower gross margin than monitoring. Gross margin on hardware revenue for the year ended December 31, 2024 was 57% compared to 54% for the year ended December 31, 2023.

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.

Future changes in the Company’s stock ownership, which may be outside of the Company’s control, may trigger an “ownership change.” In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change.” The Company will complete a full analysis of the tax attribute carryforwards prior to any utilization of tax attributes which may be subject to limitation. 17 Results of Operations The selected consolidated statement of operations data for the years ended December 31, 2024 and 2023 and consolidated balance sheet data as of December 31, 2024 and 2023 has been derived from our audited consolidated financial statements included in this Annual Report.

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.

PG CP Total Year ended December 31, 2024: Revenues from customers $ 9,882 $ 1,104 $ 10,986 Percentage of total revenues by segment 90 % 10 % 100 % Segment gross profit $ 7,334 $ 665 $ 7,999 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 2024 Compared to 2023 Revenue.

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.

Our net income in 2024 is comprised of net income at OmniMetrix of $3,027,000, corporate expense of $1,017,000, current state income tax expense of $123,000, the non-controlling interest share of our net income in OmniMetrix of $28,000 offset by deferred income tax benefit as a result of the release of our valuation allowance of $4,435,000.

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.

Corporate overhead decreased by $37,000 (3%), from $1,057,000 in 2023 to $1,020,000 in 2024, primarily due to the non-recurring expenses of $102,000 related to the execution of the reverse stock split in 2023 and a net decrease in other expense categories of $2,000 in the aggregate offset by an increases in (i) legal fees of $24,000, (ii) tax professional fees of $28,000, and (iii) audit fees of $15,000.

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%).

Gross margin on monitoring revenue was 94% for the year ended December 31, 2024 compared to 93% for the year ended December 31, 2023. 19 R&D expense. During 2024, OmniMetrix recorded $1,012,000 of R&D expense as compared to $875,000 in 2023, an increase of $137,000 (16%).

The following table sets forth certain information with respect to revenues and profits of our reportable business segments for the years ended December 31, 2023 and 2022 (dollars in thousands), including the percentages of revenues attributable to such segments. (See Note 12 to our consolidated financial statements for the definitions of our reporting segments).

(See Note 12 to our consolidated financial statements for the definitions of our reporting segments).

Removed

Added

Removed

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.

Added

Other Matters On June 1, 2024, we entered into a contract (the “Material Contract”) with one of the nation’s largest cell phone providers to provide monitoring hardware and services. Under the contract, OmniMetrix will provide monitoring devices and related remote monitoring and control services for between 5,000 to 10,000 cell tower backup generators in the U.S.

Removed

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.

Added

The monitoring hardware and monitoring services, which will be deployed over a two-year period. Shipping of hardware commenced in the third quarter of 2024 and installation and monitoring services commenced in the fourth quarter of 2024. We have recognized $1,637,000 in hardware revenue and $24,000 in monitoring revenue from this contract as of year-end 2024.

Removed

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

Added

Our current expectation of total revenue over the life of the contract is approximately $5.4 million, which encompasses the revenue from the sales of the hardware and the first year of monitoring. We have not included in this estimate monitoring after the first year.

Removed

Added

These estimates can also affect our supplemental information disclosures, including information about contingencies, risk and financial condition. We believe, given current facts and circumstances, that our estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied.

Removed

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.

Added

Management believes our most critical accounting estimates and assumptions are in the area of revenue recognition and valuation allowance. 16 Valuation Allowance We regularly review our deferred tax assets for recoverability considering historically profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies.

Removed

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.

Added

In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified.

Removed

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.

Added

We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized.

Removed

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.

Added

The net carrying amount of the Company’s deferred tax assets is based on the Company’s belief that it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets.

Removed

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.

Added

The ultimate realization of the deferred tax assets depends upon our ability to generate sufficient taxable income in the future. In forecasting future taxable income, management uses estimates and makes assumptions regarding significant future events, including the timing and number of new hardware sales contracts and associated monitoring revenue.

Removed

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.

Added

In evaluating our ability to recover our deferred tax assets, we consider and weigh all available positive and negative evidence, including our past operating results, the existence of cumulative losses in the most recent years and our forecast of future taxable income.

Removed

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.

Added

When the likelihood of the realization of existing deferred tax assets changes, adjustments to the valuation allowance are charged in the period in which the determination is made.

Removed

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.

Added

If our estimates and assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets, resulting in additional income tax expense in the Company’s Consolidated Statements of Operations, or conversely to reduce the existing valuation allowance resulting in less income tax expense.

Removed

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.

Added

In light of the Company’s generation of three-year cumulative positive income through December 31, 2024, the Company believes that it is more-likely-than-not that a portion of the deferred tax assets will be utilized.

Removed

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.

Added

Therefore, the Company has released valuation allowance on its deferred tax assets (other than as stated above) in the amount of $4,686,000 for the year ended December 31, 2024. As of December 31, 2024, we believe, based on our projections, that a partial valuation allowance of $11,400,000 is necessary against our deferred tax assets.

Removed

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

Added

Uncertainty exists related to the generation of future hardware and monitoring revenue, nonetheless the Company believes sufficient positive evidence exists which supports the partial reversal of the valuation allowance.

Removed

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”).

Added

In recent years, the Company executed new contracts, growing hardware and monitoring revenue which resulted in cumulative pre-tax earnings of $1,476,000 over the prior three years which we believe is significant positive evidence to support the reversal of valuation allowance during 2024. At this time, however, we cannot assure you that we will be successful in doing so.

Removed

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.

Added

Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when appropriate. As of December 31, 2024, the Company has completed a 382 analysis and concluded that none of the unreserved net operating losses were subject to 382 limitations.

Removed

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.

Added

The utilization of the Company’s federal and state net operating losses may be subject to a limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code, as well as similar state provisions. Such limitations may result in the expiration of net operating loss (NOL) carryforwards before their utilization.

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Top changes in ACORN ENERGY, INC.'s 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 1C. Cybersecurity

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

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