10q10k10q10k.net

What changed in ACORN ENERGY, INC.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of ACORN ENERGY, INC.'s 2024 and 2025 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 2025 report.

+134 added−153 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-06)

Top changes in ACORN ENERGY, INC.'s 2025 10-K

134 paragraphs added · 153 removed · 105 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

19 edited+7 added−12 removed26 unchanged
Biggest changeIn the CP segment, OmniMetrix offers three primary product lines: the Hero 2 Rectifier Monitor, the Patriot Plus Test Station Monitor, and the RAD TM (Remote AC Mitigation Disconnect). All of these products are used to monitor cathodic protection systems, a process which reduces rust and corrosion on pipelines used to transport natural gas.
Biggest changeOmniMetrix also sells the Smart Annunciator for commercial customers who require a large touch-screen display of generator status. In the CP segment, OmniMetrix offers the Hero 2 Rectifier Monitor, Patriot Plus Test Station Monitor, and RAD/RADex product family. These products monitor cathodic protection systems that reduce rust and corrosion on natural gas pipelines.
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.
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 commercial/industrial and residential power generation equipment.
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, other impacts of climate change, demand response and cybersecurity threats.
OmniMetrix continues to see a rapidly growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including natural disasters, other impacts of climate change, demand response, cybersecurity threats and terrorist attacks.
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.
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.
Our website also includes our Code of Business Conduct and Ethics, and our Board of Directors’ Committee Charter for the Audit Committee.
Our website also includes our Code of Business Conduct and Ethics, and our Board of Directors’ Committee Charter for the Audit Committee. 6
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.
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 deeply focused on providing excellent customer experience and product and service designs for a complete end-to-end program for its customers.
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.
Thirteen of OmniMetrix’s 27 employees are engaged in production, engineering and technical support, eight in marketing and sales and six 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.
Year 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).
Year ended December 31, 2025 OmniMetrix Acorn Total Revenues $ 11,478 $ — $ 11,478 Cost of goods sold (COGS) 2,663 — 2,663 Gross profit 8,815 — 8,815 Gross profit margin 77 % 77 % Research and development (R&D) expense 1,094 — 1,094 Selling, general and administrative (SG&A) expense 4,352 1,380 5,732 Operating income (loss) $ 3,369 $ (1,380 ) $ 1,989 Year ended December 31, 2024 OmniMetrix Acorn Total Revenues $ 10,986 $ — $ 10,986 COGS 2,987 — 2,987 Gross profit 7,999 — 7,999 Gross profit margin 73 % 73 % R&D expense 1,012 — 1,012 SG&A expense 4,030 1,020 5,050 Operating income (loss) $ 2,957 $ (1,020 ) $ 1,937 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).
We continually evaluate opportunities related to our activities, and our goal is to maximize shareholder value and position our holdings for a strategic event, which may include co-investment by one or more third parties and/or a synergistic acquisition of another company.
During 2025 and 2024, each of our PG and CP activities represented a reportable segment. We continually evaluate opportunities related to our activities, and our goal is to maximize shareholder value and position our holdings for a strategic event, which may include co-investment by one or more third parties and/or a synergistic acquisition of another company.
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.
R&D Expense, Net R&D expense recorded for the years ended December 31, 2025 and 2024 for our OmniMetrix subsidiary is as follows (amounts in thousands of U.S. dollars): Years ended December 31, 2025 2024 OmniMetrix $ 1,094 $ 1,012 Employees At December 31, 2025, we had a total of 27 employees (all of whom were employed in the United States by OmniMetrix), of whom 26 were full-time and one was part-time.
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 is well-positioned to grow its customer base and expand its product offerings in this market.
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 is well-positioned to grow its customer base and expand its product offerings in this market. Products & Services In the PG segment, OmniMetrix sells devices and services built on our OCOM communications platform.
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).
The Company executes an aggressive sales strategy and 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).
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.
There are two types of competitors in the PG marketplace: (1) Independent monitoring organizations produce 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. Other competitors operate in the reactive “failure notification” mode described in the early stages of the OmniMetrix business model.
Customers and Markets At its core, the OmniMetrix family of PG monitors (TrueGuard PRO and TrueGuard 2) can remotely monitor and control a variety of industrial engine applications, including engines, standby generators, air and gas compressors, fire pumps, batteries, turbines, pumps and other equipment.
Customers and Markets At its core, the OmniMetrix family of PG monitors can remotely monitor and control a variety of industrial engine applications, including engines, standby generators, air and gas compressors, fire pumps, batteries, turbines, pumps and other equipment. Early in the company’s history, a strategic decision was made to focus primarily on the standby power generation market.
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.
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.
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. There was no diagnostic data opportunity, but service organizations could practice a reactive service approach.
Customers were notified that some event had taken place after the fact. There was no diagnostic data opportunity, but service organizations could practice a reactive service approach.
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.
OmniMetrix also offers the Smart Annunciator product for commercial customers who require a visual representation of generator status via a touchscreen display. ● Cathodic Protection (“CP”). 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.
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.
Subsequently,, the company has expanded its focus to add several additional applications where it sees demand. Standby generator monitoring is part of the IoT ecosystem, whereby multiple sensing and monitoring devices are aggregated into one simple dashboard for customers.
The TrueGuard product family connects directly to the engine’s control panel and captures all data flowing through the control panel. As a result, the product provides the ability to identify whether an emergency generator is capable of operating as expected.
The Omni family—including the Omni residential monitor and OmniPro commercial monitor—launched in 2025 and is phasing out the legacy TrueGuard product line. These devices connect directly to generator control panels across all brands and models, capturing operational data to identify whether emergency power equipment is capable of operating as expected.
Removed
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”).
Added
In 2025, we launched the Omni family of products—the OmniPro commercial monitor and the Omni residential monitor—built on a new proprietary common communications core called the OCOM, a platform designed to enhance connectivity, reliability and performance in remote monitoring systems. These products are replacing our legacy TrueGuard product lines, offering enhanced flexibility, expandability, and improved connectivity with easier installation.
Removed
OmniMetrix also offers the industry’s first RAD TM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools, which can drastically reduce a company’s expense while increasing employee safety. During 2024, each of our PG and CP activities represented a reportable segment.
Added
The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. In 2025, we launched the RADex, an OCOM-based expansion of our RAD™ (Remote AC Mitigation Disconnect) that adds cathodic protection measurements while retaining the ability to remotely disconnect/connect AC mitigation tools on solid-state decouplers, reducing expense and increasing employee safety.
Removed
Products & Services In the PG segment, OmniMetrix sells a line of devices and services built on our baseline TrueGuard wireless remote monitor. These devices are broadly applicable across all brands and models of emergency power generators and industrial engine applications.
Added
The Hero 2 monitors and controls rectifiers, the most common point of failure in pipeline systems. The Patriot Plus provides data points along pipeline segments including AC current density. The patented RAD and RADex mount onto existing solid-state decouplers to remotely disconnect/connect AC mitigation tools; the RADex, launched in 2025 on the OCOM platform, adds cathodic protection measurement capabilities.
Removed
OmniMetrix also sells 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 large touch-screen display.
Added
On January 1, 2026, Acorn Energy entered into a strategic technology partnership with AIO Systems, Ltd. to expand Acorn’s infrastructure asset management technology offerings for cell towers, data centers, and utility assets in North America.
Removed
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.
Added
Under the agreement, Acorn has exclusive rights to market, distribute, integrate, and sell AIO’s cloud-based monitoring and analytics solutions under the OmniMetrix brand in the United States, Canada, and Mexico, significantly expanding Acorn’s product portfolio and addressable market.
Removed
The Patriot Plus Test Station Monitor is also used to provide data points along the pipeline segment powered by the rectifier including AC current density. Additionally, the industry’s first and patented RAD mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools which drastically reduces company expense while increasing employee safety.
Added
The partnership leverages AIO’s globally-deployed technology and provides for shared Software-as-a-Solution (SaaS) and monitoring revenues, with Acorn expecting a phased rollout and limited near-term revenue contribution as integration and market expansion efforts progress.
Removed
Early in the company’s history, a strategic decision was made to focus primarily on the standby power generation market. In the past several years, the company has expanded its focus to add several additional applications where it sees demand.
Added
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. 4 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.
Removed
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
Facilities OmniMetrix’s activities are currently conducted in 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, under a lease that expires September 30, 2025. 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 unused office space.
Removed
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.
Removed
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.
Removed
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

34 edited+8 added−11 removed38 unchanged
Biggest changeOur 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.
Biggest changeOur cash was deposited with a U.S. bank and amounted to $4,454,000 at December 31, 2025. We had one customer, the party to the Material Contract, as defined below under Other Matters in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, which represented approximately 42% of the accounts receivable at December 31, 2025.
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.
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. 9 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.
We may also not be able to locate or employ on acceptable terms qualified replacements for our senior management if their services were no longer available. 7 Loss of the services of a few key employees could harm our operations. We depend on key technical employees and sales personnel.
We may also not be able to locate or employ on acceptable terms qualified replacements for our senior management if their services were no longer available. Loss of the services of a few key employees could harm our operations. We depend on key technical employees and sales personnel.
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.
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% of the Company’s stock, and Tracy Clifford, CFO of Acorn and COO of OmniMetrix.
The ever-increasing use and evolution of technology, including cloud-based computing, creates opportunities for the unintentional dissemination or intentional destruction or modification of confidential information stored in our, or our third-party providers’ systems, portable media or storage devices.
The ever-increasing use and evolution of technology, including cloud-based computing and AI, creates opportunities for the unintentional dissemination or intentional destruction or modification of confidential information stored in our, or our third-party providers’ systems, portable media or storage devices.
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.
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, including by actors using AI, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations.
Fluctuations in our stock price may continue to occur in response to various factors, many of which we cannot control, including: ● general economic and political conditions and specific conditions in the markets we address; ● quarter-to-quarter variations in our operating results; ● strategic investments or divestments; ● announcements of changes in our senior management; ● the gain or loss of one or more significant customers or suppliers; ● announcements of technological innovations or new products by our competitors, customers or us; ● the gain or loss of market share in any of our markets; ● changes in accounting rules; ● changes in investor perceptions; or ● changes in expectations relating to our products, plans and strategic position or those of our competitors or customers.
Fluctuations in our stock price may continue to occur in response to various factors, many of which we cannot control, including: ● general economic and political conditions and specific conditions in the markets we address; ● quarter-to-quarter variations in our operating results; ● strategic investments or divestments; ● announcements of changes in our senior management; ● the gain or loss of one or more significant customers or suppliers; ● announcements of technological innovations or new products by our competitors, customers or us; ● the gain or loss of market share in any of our markets; ● changes in accounting rules; ● changes in investor perceptions; or ● changes in expectations relating to our products, plans and strategic position or those of our competitors or customers. 11 We do not intend to pay dividends to our stockholders in the foreseeable future.
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.
As of March 3, 2026, we had consolidated cash of $4,131,000 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.
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.
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.
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.
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.
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.
In addition to the options noted above, at March 3, 2026, there were 57,178 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.
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.
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.
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.
As of that date, we had 66,758 options outstanding and exercisable with a weighted average exercise price of $9.06 per share, which if exercised would result in the issuance of additional shares of our common stock.
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.
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.
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.
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 3, 2026, 2,506,501 shares of our common stock were issued and outstanding.
We anticipate the need to closely manage our cash for the foreseeable future and cannot provide any assurance as to the availability or terms of any such financing or its effect on our liquidity and capital resources.
Any significant acquisition could require substantial use of our capital and may require significant debt or equity financing. We anticipate the need to closely manage our cash for the foreseeable future and cannot provide any assurance as to the availability or terms of any such financing or its effect on our liquidity and capital resources.
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.
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.
Integrating acquired companies involves a number of risks that could materially and adversely affect our business, including: ● failure of the acquired companies to achieve the results we expect; ● inability to retain key personnel of the acquired companies; ● dilution of existing stockholders; ● potential disruption of our ongoing business activities and distraction of our management; ● difficulties in retaining business relationships with suppliers and customers of the acquired companies; ● difficulties in coordinating and integrating overall business strategies, sales and marketing, and research and development efforts; and ● difficulties in establishing and maintaining uniform standards, controls, procedures and policies, including accounting controls and procedures.
Integrating acquired companies involves a number of risks that could materially and adversely affect our business, including: ● failure of the acquired companies to achieve the results we expect; ● inability to retain key personnel of the acquired companies; ● dilution of existing stockholders; ● potential disruption of our ongoing business activities and distraction of our management; ● difficulties in retaining business relationships with suppliers and customers of the acquired companies; ● difficulties in coordinating and integrating overall business strategies, sales and marketing, and research and development efforts; and ● difficulties in establishing and maintaining uniform standards, controls, procedures and policies, including accounting controls and procedures. 7 We have reported material weaknesses in internal controls over financial reporting as of December 31, 2025 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.
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.
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.
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.
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.
In particular, at the present time we are facing significant competition from certain generator manufacturers who offer their own monitoring solutions. OmniMetrix may not be able to access sufficient capital to support growth.
In particular, at the present time we are facing significant competition from certain generator manufacturers who offer their own monitoring solutions. The leveraging of any of such advantages by our current and/or potential competitors could hinder OmniMetrix’s ability to compete effectively. OmniMetrix may not be able to access sufficient capital to support growth.
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.
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.
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. 10 The cellular networks used by OmniMetrix are also subject to periodic technical updates that may require corresponding updates to, or replacement of, OmniMetrix’s monitoring equipment.
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.
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 2025, our common stock traded at prices as low as $12.42 and as high as $33.00 per share.
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. 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.
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.
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.
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.
However, at December 31, 2024, the balance of accounts receivable under the Material Contract was the majority of the outstanding balance of accounts receivable.
However, at December 31, 2025, the balance of accounts receivable under the Material Contract represented more than 40% of the total outstanding balance of accounts receivable.
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.
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.
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.
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 markets or customer-mandated product and service improvements, OmniMetrix’s results of operations and financial condition may suffer.
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.
Part of our business plan includes the possibility of acquiring new companies either as new platform companies or complimentary companies. 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.
We rely on a combination of patents, trademarks, copyrights, trade secret laws and restrictions on disclosure to protect our intellectual property rights. Our ability to compete effectively will depend, in part, on our ability to protect our proprietary technology, systems’ designs and manufacturing processes.
If we are unable to protect our intellectual property, or our intellectual property protection efforts are unsuccessful, others may duplicate our technology. We rely on a combination of patents, trademarks, copyrights, trade secret laws and restrictions on disclosure to protect our intellectual property rights.
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.
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.
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.
As of March 3, 2026, 58% of this balance had been collected, with the remainder not yet due. Typically, credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising our customer base.
The cellular networks used by OmniMetrix are also subject to periodic technical updates that may require corresponding updates to, or replacement of, OmniMetrix’s monitoring equipment. Cellular networks have evolved over time to offer more robust technical capabilities in both voice and data transmission.
Cellular networks have evolved over time to offer more robust technical capabilities in both voice and data transmission. 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.
Removed
There is a limited trading market for our common stock and the price of our common stock may be volatile.
Added
Our trade secrets may also be known without breach of such agreements or may be independently developed by competitors. 8 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.
Removed
Our common stock is traded on the OTCQB marketplace under the symbol “ACFN.” The OTCQB is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities and provides significantly less liquidity than a listing on the NASDAQ Stock Market or other national securities exchanges.
Added
International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects. We operate in a global economy, and our business depends on a global supply chain for the manufacturing of our products.
Removed
The OTCQB securities are traded by a community of market makers that enter quotes and trade reports. This market is limited in comparison to the national stock exchanges, and any prices quoted may not be a reliable indication of the value of our common stock.
Added
There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations.
Removed
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.
Added
The current international trade and regulatory environment is subject to significant ongoing uncertainty. We source certain components and specialized equipment from international suppliers, with reliance on foreign manufacturers, including from China, Taiwan and Mexico.
Removed
In addition, the market price of our common stock could be subject to wide fluctuations in response to: ● quarterly variations in our revenues and operating expenses; ● announcements of new products or services by us; ● fluctuations in interest rates; ● significant sales of our common stock; ● the operating and stock price performance of other companies that investors may deem comparable to us; and ● news reports relating to trends in our markets or general economic conditions.
Added
While we have not experienced a material impact to date from tariffs, any changes in tariff policies, particularly those affecting the locations of our suppliers and/or electronics and related materials, could materially increase our costs and reduce our profitability.
Removed
Part of our business plan includes the acquisition of new companies either as new platform companies or complimentary companies.
Added
Recent and potential future changes in international trade policies, including U.S.-China trade relations and electronics-specific tariffs, could present material risks to our operations and financial performance. We are dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity breaches and data leakage.
Removed
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.
Added
Many of OmniMetrix’s existing products may require ongoing engineering and upgrades in conjunction with market developments as well as specific customer needs.
Removed
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.
Added
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.
Removed
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.
Removed
We may in the future be involved in product liability and product warranty claims relating to the products we manufacture and distribute that, if adversely determined, could adversely affect our financial condition, results of operations, and cash flows.
Removed
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. Our financial instruments could subject us to concentrations of credit risk.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−1 removed8 unchanged
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.
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. 12 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, 2024, 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, 2025, the scope and impact of any future incident cannot be predicted. See “Item 1A.
Removed
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

5 edited+2 added−1 removed1 unchanged
Biggest changeIf 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.
Biggest changeOn July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc. to sublease from the Company 1,900 square feet of the Company’s 21,000 square feet office and production space in the Hamilton Mill Business Park located in Buford, Georgia.
ITEM 2. PROPERTIES OmniMetrix’s activities are currently conducted in approximately 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, under a lease that expires on September 30, 2025. We are currently considering new office space while also discussing potential renewal terms with our landlord.
ITEM 2. PROPERTIES OmniMetrix’s activities are currently conducted in approximately 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia, under a lease that was amended on June 20, 2025 to extend the lease term through November 30, 2030. The annual operating lease expense was $184,000 in 2025 and $129,000 in 2024.
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.
After the offset of the investment in leasehold improvements and other expenses related to the sublease, the total amount payable to our landlord under the sublease was $8,295 for the year ended December 31, 2025, and $6,680 for the year ended December 31, 2024.
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.
For 2026, the annual operating lease expense will be $216,000 for the year ending through December 31, 2026. OmniMetrix is currently utilizing only a portion of these leased facilities.
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
Below are the future payments (in thousands) expected to be received from King Industrial Realty, Inc. under the sublease. The Company expects to remit fifty percent of these amounts net of the annual service cost of approximately $2,600 to our landlord. Year ended December 31, 2026 41 2027 42 2028 $ 33 Total undiscounted cash flows $ 116 ITEM 3.
Removed
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.
Added
This sublease was amended on August 15, 2025 to extend the term through September 30, 2028 and to provide a monthly sublease payment of $3,374 plus annual escalators (the average monthly sublease payment in 2025 was $2,790), which includes the base rent plus a pro-rata share of utilities, property taxes and insurance.
Added
LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 13 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed0 unchanged
Biggest changeITEM 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.
Biggest changeITEM 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 NASDAQ.
Holders 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.]
Holders As of March 3, 2026, the last reported sales price of our common stock on NASDAQ was $22.50, there were 57 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 7. Management's Discussion & Analysis

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

43 edited+12 added−23 removed15 unchanged
Biggest changeThis 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.
Biggest changeThis increase was primarily due to increases of (i) $215,000 in personnel expenses, (ii) $66,000 in IT consulting and staff augmentation fees, (iii) $58,000 in facilities expense due to the lease amendment for our office space, and (iv) $57,000 in net aggregate expenses in other categories offset by decreases in (i) commission expenses of $61,000 and (ii) $13,000 in travel and trade show expenses.
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.
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 commercial/industrial and residential power generation equipment.
Residential, commercial and industrial standby generators, turbines, compressors, pumps, pumpjacks, light towers and other industrial equipment are part of the critical infrastructure increasingly becoming monitored in IoT applications.
Commercial, industrial and residential standby generators, turbines, compressors, pumps, pumpjacks, light towers and other industrial equipment are part of the critical infrastructure increasingly becoming monitored in IoT applications.
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.
Our 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.
In addition, OmniMetrix continues to see a growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including terrorist attacks, natural disasters, and cybersecurity threats.
In addition, OmniMetrix continues to see a growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including grid outages, natural disasters, cybersecurity threats and terrorist attacks.
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.
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. 18 Contractual Obligations and Commitments The table below provides information concerning obligations under certain categories of our contractual obligations as of December 31, 2025.
The recorded income tax benefit contributed $1.78 to our basic earnings per share of $2.53 and $1.77 of our diluted earnings per share of $2.51 at December 31, 2024. Net income attributable to Acorn Energy. We had net income attributable to Acorn of $6,294,000 in 2024 compared to $119,000 in 2023.
At December 31, 2024, the recorded income tax benefit contributed $1.78 to our basic earnings per share of $2.53, and $1.77 of our diluted earnings per share of $2.51. Net income attributable to Acorn Energy. We had net income attributable to Acorn of $2,510,000 in 2025 compared to $6,294,000 in 2024.
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.
Imputed interest is $166,000 resulting in $158,000 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.
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.
During the year ended December 31, 2024, net cash of $56,000 was used in investing activities. Net cash of $71,000 and $28,000 was provided by financing activities during the years ended December 31, 2025 and 2024, respectively, which represents proceeds from the exercise of stock options, net of $16,000 used for stock repurchases in the year ended December 31,2025.
We make routine estimates and judgments in determining net realizable value of accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other reserves as well as the amortization period for deferred commissions payable.
We make routine estimates and judgments in determining net realizable value of accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other reserves as well as the amortization period for deferred commissions payable. Management believes our most critical accounting estimates and assumptions are in the area of valuation allowance.
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.
In 2025, revenue of $10,741,000 was attributed to the PG segment and revenue of $737,000 was attributed to the CP segment, as compared to the 2024 revenue of $9,882,000 that was attributed to the PG segment and $1,104,000 that was attributed to the CP segment.
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 monitoring revenue was due to an increase in the number of connections being monitored and growth in our customer base. Gross profit . Gross profit was $8,815,000, reflecting a 77% gross margin on revenue in 2025, compared with a gross profit of $7,999,000, reflecting a 73% gross margin on revenue in 2024.
Selected 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.
Selected Consolidated Statement of Operations Data: For the Years Ended December 31, 2025 2024 (in thousands, except per share data) Revenue $ 11,478 $ 10,986 COGS 2,663 2,987 Gross profit 8,815 7,999 R&D expense 1,094 1,012 SG&A expense 5,732 5,050 Operating income 1,989 1,937 Interest income, net 121 73 Income before income taxes 2,110 2,010 Current state tax expense (30 ) (123 ) Deferred income tax benefit 464 4,435 Net income after income taxes 2,544 6,322 Non-controlling interest share of income (34 ) (28 ) Net income attributable to Acorn Energy, Inc. stockholders $ 2,510 $ 6,294 Basic and diluted net income per share attributable to Acorn Energy, Inc. stockholders: Net income per share attributable to Acorn Energy, Inc. stockholders – basic $ 1.01 $ 2.53 Net income per share attributable to Acorn Energy, Inc. stockholders – diluted $ .99 $ 2.51 Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic 2,496 2,487 Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – diluted 2,538 2,512 The following table sets forth certain information with respect to revenues and profits of our reportable business segments for the years ended December 31, 2025 and 2024 (dollars in thousands), including the percentages of revenues attributable to such segments.
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.
We expect a moderate increase in R&D expense for 2026 due to engineering salary increases granted effective January 1, 2026, and for continued investment in work on certain initiatives to continue to redesign certain older products and expand product lines to increase our level of innovation ahead of our competitors. SG&A expense.
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.
The decrease in total hardware revenue during the year ended December 31, 2025 is further detailed in the table below: Reconciliation of Hardware Revenue 2025 2024 Amortization of deferred revenue $ 956 $ 1,841 Sales of custom designed units and related accessories 183 26 Hardware sales under the Material Contract 2,293 1,637 Hardware sales 1,944 2,378 Other accessories, services, shipping and miscellaneous charges 542 551 Total hardware revenue $ 5,918 $ 6,433 PG hardware revenue decreased $155,000 (3%) during the year ended December 31, 2025 to $5,424,000 compared to $5,579,000 during the year ended December 31, 2024.
Other Liquidity Matters We had $2,326,000 of cash on December 31, 2024, and $2,800,000 on March 4, 2025.
Other Liquidity Matters We had $4,454,000 of cash on December 31, 2025, and $4,131,000 on March 3, 2026.
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.
PG CP Total Year ended December 31, 2025: Revenues from customers $ 10,741 $ 737 $ 11,478 Percentage of total revenues by segment 94 % 6 % 100 % Segment gross profit $ 8,344 $ 471 $ 8,815 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 16 2025 Compared to 2024 Revenue.
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 $1,991,000 from its operations while our corporate headquarters used $1,086,000 in its operating activities during the period. During the year ended December 31, 2025, net cash of $33,000 was used in investing activities, primarily related to computer equipment purchases for technology upgrades.
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.
The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. 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.
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.
In 2025, OmniMetrix recorded total revenue of $11,478,000, as compared to total revenue of $10,986,000 in 2024, for an increase of $492,000 (5%). The PG segment includes our monitoring device for generators, industrial air compressors and our annunciator products.
For the year ended December 31, 2024, the Company recorded an income tax benefit of $4,435,000, offset by current state income tax expense of $123,000 compared to state income tax expense for the year ended December 31, 2023 of $9,000. The change in the tax expense was primarily due to the partial release of the Company’s valuation allowance in 2024.
For the year ended December 31, 2025, the Company recorded an income tax benefit of $464,000, offset by current state income tax expense of $30,000, compared to an income tax benefit of $4,435,000, offset by current state income tax expense of $123,000, for the year ended December 31, 2024.
OmniMetrix’s SG&A expense increased $32,000 (0.8%), from $3,998,000 in 2023 to $4,030,000 in 2024.
OmniMetrix’s SG&A expense increased $322,000 (8%), from $4,030,000 in 2024 to $4,352,000 in 2025.
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.
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. At this time, however, we cannot assure you that we will be successful in doing so.
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.
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. 14 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.
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.
Cash Payments Due to Contractual Obligations Years Ending December 31, (in thousands) Total 2026 2027-2028 2029-2030 Operating leases* $ 1,208 $ 216 $ 488 $ 504 Contractual services 217 202 15 — Purchase obligations** 434 434 — — Total contractual cash obligations $ 1,859 $ 852 $ 503 $ 504 *Reflects the gross amount of the operating lease liabilities.
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.
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. 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.
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.
We will continue to have annual renewal monitoring revenue on these units each year for all connected units. 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.
Hardware revenue increased $2,636,000 (69%) from $3,797,000 during the year ended December 31, 2023 to $6,433,000 during the year ended December 31, 2024.
Hardware revenue decreased $515,000 (8%) from $6,433,000 during the year ended December 31, 2024 to $5,918,000 during the year ended December 31, 2025.
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.
We anticipate that our annual SG&A costs in 2026 will increase by approximately 9% primarily due to the increase in our facility lease expense pursuant to the lease amendment executed in June 2025 to extend the lease to November 2030 and also to increasing wage and benefit expenses as a result of merit increases effective in January 2026. 17 Interest income, net.
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.
Under the contract, OmniMetrix has provided monitoring devices and related remote monitoring and control services for between 5,000 and 10,000 cell tower backup generators in the U.S. Shipping of hardware commenced in the third quarter of 2024 and installation and monitoring services commenced in the fourth quarter of 2024.
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%).
Gross margin on hardware revenue for the year ended December 31, 2025 was 60% compared to 57% for the year ended December 31, 2024. Gross margin on monitoring revenue was 94% for the year ended December 31, 2025 compared to 94% for the year ended December 31, 2024. R&D expense.
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.
The ultimate realization of the deferred tax assets depends upon our ability to generate sufficient taxable income in the future.
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.
Interest income in the year ended December 31, 2025 was $121,000 compared to $73,000 in the year ended December 31, 2024. The increase was due to higher average cash balances during the year on which interest was earned. Income taxes.
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.
Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when appropriate.
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.
OmniMetrix also offers the Smart Annunciator product for commercial customers who require a visual representation of generator status via a touchscreen display. ● Cathodic Protection (“CP”). 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.
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.
Based on the current products being sold, the Company expects continued decreases in the deferred hardware revenue balance in the foreseeable future. Net cash increased during the year ended December 31, 2025 by $2,128,000, of which $2,090,000 was provided by operating activities, $33,000 was used in investing activities, and $71,000 was provided by financing activities.
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.
The Company currently has a three-year cumulative income position which is positive evidence that it is more likely than not the deferred tax assets will be realized. As of December 31, 2025, we believe, based on our projections, that a partial valuation allowance of $10,326,000, continues to be necessary against our deferred tax assets.
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.
Future changes in the Company’s stock ownership, which may be outside of the Company’s control or future equity offerings or acquisitions that have equity as a component of the purchase price consideration may trigger an “ownership change” and the utilization of the Company’s federal and state net operating losses may be subject to a limitation under the Internal Revenue Code, as well as similar state provisions.
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.
Such deferred revenue does not require a significant cash outlay for the revenue to be recognized. Total deferred revenue decreased by $824,000, from $4,233,000 at December 31, 2024 to $3,409,000 at December 31, 2025, as a result of the sales mix of products sold.
During the year ended December 31, 2023, our operating activities provided $72,000 of net cash.
During the year ended December 31, 2025, our operating activities provided $2,090,000 of net cash. Our OmniMetrix subsidiary provided $3,513,000 from its operations while our corporate headquarters used $1,423,000 in its operating activities during the period.
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 also had a decrease in CP hardware revenue of $360,000 (42%) to $494,000 during the year ended December 31, 2025 from $854,000 during the year ended December 31, 2024. Monitoring revenue increased $1,007,000 (22%) from $4,553,000 in the year ended December 31, 2024 to $5,560,000 in the year ended December 31, 2025.
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.
Such limitations may result in the expiration of net operating loss (NOL) carryforwards before their utilization. 15 Results of Operations The selected consolidated statement of operations data for the years ended December 31, 2025 and 2024 and consolidated balance sheet data as of December 31, 2025 and 2024 has been derived from our audited consolidated financial statements included in this Annual Report.
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.
Our net income in 2025 is comprised of net income at OmniMetrix of $3,488,000, corporate expense of $1,378,000, current state income tax expense of $30,000, the non-controlling interest share of our net income in OmniMetrix of $34,000 offset by deferred income tax benefit as a result of the release of our valuation allowance of $464,000.
Removed
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. 15 ● Cathodic Protection (“CP”).
Added
In 2025, we launched the Omni family of products—the OmniPro commercial monitor and the Omni residential monitor—built on a new proprietary common communications core called the OCOM. These products are replacing our legacy TrueGuard product lines, offering enhanced flexibility, expandability, and improved connectivity with easier installation.
Removed
OmniMetrix also offers the industry’s first RAD TM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools, which can drastically reduce a company’s expense while increasing employee safety.
Added
The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. In 2025, we launched the RADex, an OCOM-based expansion of our RAD™ (Remote AC Mitigation Disconnect) that adds cathodic protection measurements while retaining the ability to remotely disconnect/connect AC mitigation tools on solid-state decouplers, reducing expense and increasing employee safety.
Removed
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.
Added
During the year ended December 31, 2025, we recognized $2,293,000 in hardware revenue and $452,000 in first-year monitoring revenue from this contract. During the year ended December 31, 2024, we recognized $1,637,000 in hardware revenue and $21,000 in first-year monitoring revenue from this contract. We have shipped all hardware that has been ordered under this contract to date.
Removed
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.
Added
In forecasting future taxable income, management’s projections and beliefs are based upon a variety of estimates and numerous assumptions made by our management with respect to, among other things, interest rates, forecasted revenue of the hardware sales and monitoring revenue or revenue streams that could generate sufficient income.
Removed
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.
Added
The gross margin increased to 77% in 2025 due to sales of the new Omni and OmniPro products which have a higher gross margin than the older model hardware products and due to higher monitoring revenue, which has a 95% gross margin, as a result of more connections.
Removed
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.
Added
During 2025, OmniMetrix recorded $1,094,000 of R&D expense as compared to $1,012,000 in 2024, an increase of $82,000 (8%). The increase in R&D expense in 2025 is related to increases in wages and bonuses paid to our engineering personnel in 2025 as well as an addition to our engineering team in the fourth quarter of 2024.
Removed
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.
Added
This increase was offset by the reduction of third-party consultant expenses due to the completion of the recent launch of the Omni and OmniPro, which had been a significant development project, and an addition to our in-house senior engineering staff.
Removed
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.
Added
Consolidated SG&A expense increased $682,000 from 2024 to 2025. Corporate overhead increased by $360,000 (35%), from $1,020,000 in 2024 to $1,380,000 in 2025.
Removed
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.
Added
The increase in corporate overhead was due to an increase of (i) $128,000 in tax professional fees from the preparation of the 2024 and the quarterly 2025 income tax provision, the calculations related to the release of the income tax valuation allowance, and the preparation of an updated 382 Study, (ii) $115,000 in expenses related to uplisting to NASDAQ which includes the NASDAQ application fee, the prorated listing fee and the legal fees associated with the uplisting process, (iii) $75,000 in stock compensation expense, (iv) $19,000 in audit fees primarily related to the work on the release of the income tax valuation allowance at December 31, 2024, and (v) a net increase of $23,000, in the aggregate, of other public company expenses.
Removed
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.
Added
The change in the income tax benefit was due to changes in the Company’s valuation allowance. The recorded income tax benefit contributed $0.19 to our basic earnings per share of $1.01, and $0.18 of our diluted earnings per share of $0.99, at December 31, 2025.
Removed
The Company has not completed a study to assess whether an “ownership change” as defined in Section 382 has occurred or whether there have been multiple ownership changes since the Company’s inception.
Added
Net operating income increased by $100,000 but net income decreased by $3,784,000 primarily due to the decrease in the positive impact of the valuation allowance. Liquidity and Capital Resources At December 31, 2025, we had working capital of $3,157,000. Our working capital includes $4,454,000 of cash and deferred revenue of $3,097,000.
Removed
On September 1, 2023, OmniMetrix launched an updated version of its products that includes new functionality in its TrueGuard, AIRGuard, Patriot and Hero products that allows its customers to have options as it relates to obtaining and utilizing the data that is provided by its hardware devices.
Added
OmniMetrix’s inventory balance increased by $818,000 at December 31, 2025 as compared to December 31, 2024 primarily related to purchases made for production of our recently launched redesigned product versions, Omni and OmniPro. During the year ended December 31, 2024, our operating activities provided $905,000 of net cash.
Removed
This new functionality allows for SIM card options, configuration options regarding IP address endpoints and DNS routes, and access to OmniMetrix’s over-the-air data protocol. This product update allows customers to have the option to purchase OmniMetrix’s monitoring service, monitor the products themselves if they have the ability in-house, or choose another monitoring provider if they so desire.
Removed
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.
Removed
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.
Removed
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 that date.
Removed
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.
Removed
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.
Removed
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.
Removed
Consolidated SG&A expense was essentially flat from 2023 to 2024, decreasing only $5,000.
Removed
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.
Removed
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.
Removed
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.

Other ACFN 10-K year-over-year comparisons