10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

Commission file number: 001-33886

ACORN ENERGY, INC.

(Exact name of registrant as specified in charter)

Delaware	22-2786081
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1000 N West Street, Suite 1200, Wilmington, Delaware	19801
(Address of principal executive offices)	(Zip Code)

410-654-3315

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at August 9, 2022
Common Stock, $0.01 par value per share	39,687,589

ACORN ENERGY, INC.

Quarterly Report on Form 10-Q

for the Quarterly Period Ended June 30, 2022

TABLE OF CONTENTS

	PAGE
PART I Financial Information
Item 1. Unaudited Condensed Consolidated Financial Statements:	3
Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	3
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	4
Condensed Consolidated Statements of Changes in Deficit for the three and six months ended June 30, 2022 and 2021	5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	24
PART II Other Information
Item 6. Exhibits	25
Signatures	26

Certain statements contained in this report are forward-looking in nature. These statements are generally identified by the inclusion of phrases such as “we expect”, “we anticipate”, “we believe”, “we estimate” and other phrases of similar meaning. Whether such statements ultimately prove to be accurate depends upon a variety of factors that may affect our business and operations. Many of these factors are described in our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

2

PART I

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	As of June 30, 2022			As of December 31, 2021
ASSETS
Current assets:
Cash	$	1,259		$	1,722
Accounts receivable, net		584			876
Inventory, net		915			617
Deferred cost of goods sold		858			799
Other current assets		221			229
Total current assets		3,837			4,243
Property and equipment, net		687			517
Right-of-use assets, net		349			399
Deferred cost of goods sold		772			714
Other assets		178			169
Total assets	$	5,823		$	6,042
LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable	$	340		$	457
Accrued expenses		156			164
Deferred revenue		3,642			3,541
Current operating lease liabilities		111			107
Other current liabilities		43			34
Total current liabilities		4,292			4,303
Long-term liabilities:
Deferred revenue		1,993			1,852
Long-term operating lease liabilities		279			336
Other long-term liabilities		14			12
Total long-term liabilities		2,286			2,200
Commitments and contingencies (Note 5)
Deficit:
Acorn Energy, Inc. shareholders
Common stock - $0.01 par value per share: Authorized – 42,000,000 shares; Issued – 39,687,589 shares at June 30, 2022 and December 31, 2021		397			397
Additional paid-in capital		102,857			102,804
Accumulated deficit		(100,980	)		(100,634	)
Treasury stock, at cost – 801,920 shares at June 30, 2022 and December 31, 2021		(3,036	)		(3,036	)
Total Acorn Energy, Inc. shareholders’ deficit		(762	)		(469	)
Non-controlling interest		7			8
Total deficit		(755	)		(461	)
Total liabilities and deficit	$	5,823		$	6,042

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

3

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	Six months ended June 30,						Three months ended June 30,
	2022			2021			2022			2021
Revenue	$	3,372		$	3,316		$	1,621		$	1,611
Cost of sales		868			884			375			389
Gross profit		2,504			2,432			1,246			1,222
Operating expenses:
Research and development expense		410			353			212			175
Selling, general and administrative expense		2,387			2,048			1,205			1,042
Impairment of software		51			—			51			—
Total operating expenses		2,848			2,401			1,468			1,217
Operating (loss) income		(344	)		31			(222	)		5
Finance expense, net		(1	)		(5	)		(1	)		(1	)
(Loss) income before income taxes		(345	)		26			(223	)		4
Income tax expense		—			—			—			—
Net (loss) income		(345	)		26			(223	)		4
Non-controlling interest share of net income		(1	)		(4	)			*		(2	)
Net (loss) income attributable to Acorn Energy, Inc. shareholders	$	(346	)	$	22		$	(223	)	$	2
Basic and diluted net (loss) income per share attributable to Acorn Energy, Inc. shareholders:	$	(0.01	)	$	0.00		$	(0.01	)	$	0.00
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders – basic and diluted
Basic		39,688			39,688			39,688			39,688
Diluted		39,688			39,914			39,688			39,936

* Less than $1

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

4

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT (UNAUDITED)

(IN THOUSANDS)

	Three and Six Months Ended June 30, 2022
	Number of Shares		Common Stock		Additional Paid-In Capital		Accumulated Deficit			Number of Treasury Shares		Treasury Stock			Total Acorn Energy, Inc. Shareholders’ Deficit			Non- controlling interests			Total Deficit
Balances as of December 31, 2021		39,688	$	397	$	102,804	$	(100,634	)		802	$	(3,036	)	$	(469	)	$	8		$	(461	)
Net loss		—		—		—		(123	)		—		—			(123	)		1			(122	)
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock option compensation		—		—		31		—			—		—			31			—			31
Balances as of March 31, 2022		39,688	$	397	$	102,835	$	(100,757	)		802	$	(3,036	)	$	(561	)	$	8		$	(553	)
Net loss		—		—		—		(223	)		—		—			(223	)			*		(223	)
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock option compensation		—		—		22		—			—		—			22			—			22
Balances as of June 30, 2022		39,688	$	397	$	102,857	$	(100,980	)		802	$	(3,036	)	$	(762	)	$	7		$	(755	)

	Three and Six Months Ended June 30, 2021
	Number of Shares		Common Stock		Additional Paid-In Capital		Accumulated Deficit			Number of Treasury Shares		Treasury Stock			Total Acorn Energy, Inc. Shareholders’ Deficit			Non-controlling interests			Total Deficit
Balances as of December 31, 2020		39,688	$	397	$	102,729	$	(100,613	)		802	$	(3,036	)	$	(523	)	$	4		$	(519	)
Net income		—		—		—		20			—		—			20			2			22
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock option compensation		—		—		15		—			—		—			15			—			15
Balances as of March 31, 2021		39,688	$	397	$	102,744	$	(100,593	)		802	$	(3,036	)	$	(488	)	$	5		$	(483	)
Net income		—		—		—		2			—		—			2			2			4
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock option compensation		—		—		21		—			—		—			21			—			21
Balances as of June 30, 2021		39,688	$	397	$	102,765	$	(100,591	)		802	$	(3,036	)	$	(465	)	$	6		$	(459	)

* Less than $1

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

5

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(IN THOUSANDS)

	Six months ended June 30,
	2022			2021
Cash flows (used in) provided by operating activities:
Net (loss) income	$	(345	)	$	26
Depreciation and amortization		48			37
Impairment of software		51			—
Non-cash lease expense		59			59
Stock-based compensation		53			36
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable		292			(98	)
Increase in inventory		(298	)		(127	)
Increase in deferred cost of goods sold		(117	)		(33	)
Increase in other current assets and other assets		(1	)		(18	)
Decrease in accounts payable and accrued expenses		(125	)		(95	)
Increase in deferred revenue		242			165
Decrease in operating lease liability		(62	)		(60	)
Increase in other current liabilities and non-current liabilities		9			1
Net cash (used in) provided by operating activities		(194	)		83
Cash flows used in investing activities:
Investments in technology		(266	)		(42	)
Other capital investments		(3	)		—
Net cash used in investing activities		(269	)		(42	)
Cash flows used in financing activities:
Short-term credit, net		—			(149	)
Net cash used in financing activities		—			(149	)
Net decrease in cash		(463	)		(108	)
Cash at the beginning of the year		1,722			2,063
Cash at the end of the period	$	1,259		$	1,955
Supplemental cash flow information:
Cash paid during the year for:
Interest	$	1		$	4
Non-cash investing and financing activities:
Accrued preferred dividends to former Acorn director and/or former OmniMetrix CEO	$	2		$	2

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

6

ACORN ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

(UNAUDITED)

NOTE 1— BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Acorn Energy, Inc. and its subsidiaries, OmniMetrix, LLC and OMX Holdings, Inc. (collectively, “Acorn” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six- and three-month periods ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. All dollar amounts are rounded to the nearest thousand and, thus, are approximate.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 31, 2022.

NOTE 2—ACCOUNTING POLICIES

Use of Estimates in Preparation of Financial Statements

The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the unaudited condensed unaudited consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods.

As applicable to these unaudited condensed consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to income taxes, inventories, account receivable allowances, contingencies, revenue recognition, management’s projections and analyses of the possible impairments.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $1,259,000 at June 30, 2022. The Company does not believe there is significant risk of non-performance by these counterparties. For the three- and six-month periods ended June 30, 2022, there were no customers that represented greater than 10% of the Company’s total invoiced sales or of our accounts receivable at June 30, 2022. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base.

Basic and Diluted Net (Loss) Income Per Share

Basic net (loss) income per share is computed by dividing the net (loss) income attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the year, excluding treasury stock. Diluted net (loss) income per share is computed by dividing the net (loss) income by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants. The dilutive effects of stock options and warrants are excluded from the computation of diluted net (loss) income per share if doing so would be antidilutive. For both the six- and three-month periods ending June 30, 2022, the number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 979,000 (which have a weighted average exercise price of $0.41) and the number of warrants that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 35,000 (which had a weighted average exercise price of $0.13). For the six- and three-month periods ending June 30, 2021, respectively, the number of options that were excluded from the computation of diluted net income per share, as they had an antidilutive effect, was 286,000 (which had a weighted average exercise price of $0.79) and 321,000 (which had a weighted average exercise price of $0.76); there were no antidilutive warrants.

7

The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):

	Six months ended June 30,					Three months ended June 30,
	2022			2021		2022			2021
Net (loss) income available to common stockholders	$	(346	)	$	22	$	(223	)	$	2
Weighted average share outstanding:
Basic		39,688			39,688		39,688			39,688
Add: Warrants		—			27		—			27
Add: Stock options		—			199		—			221
Diluted		39,688			39,914		39,688			39,936
Basic and diluted net (loss) income per share	$	(0.01	)	$	0.00	$	(0.01	)	$	0.00

Recently Issued Accounting Principles

Other than the pronouncement noted below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the six- and three-month periods ended June 30, 2022, that are of material significance, or have potential material significance, to the Company.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements and related disclosures.

NOTE 3—LIQUIDITY

At June 30, 2022, the Company had negative working capital of $455,000. The Company’s working capital includes $1,259,000 of cash and deferred revenue of $3,642,000. Such deferred revenue does not require significant cash outlay for the revenue to be recognized. Net cash decreased during the six months ended June 30, 2022 by $463,000, of which $194,000 was used in operating activities and $269,000 was used in investing activities

During the first six months of 2022, the Company’s OmniMetrix, LLC subsidiary provided $371,000 from operations while the Company’s corporate headquarters used $565,000 during the same period.

OmniMetrix is considered an essential business because it provides infrastructure support to both government and commercial sectors and across key industries. The Company has experienced minimal negative impacts due to the COVID-19 pandemic to date. Throughout the pandemic, the Company continued to realize new equipment sales (although not at the anticipated growth rate due to travel and meeting restrictions which have negatively impacted the sales closing timeline), has continued to collect its monthly recurring monitoring revenues and has retained its customer base. While the impacts of COVID-19 in the future are uncertain, the Company believes that due to the need for backup power and the desirability of remote monitoring services, it should continue to be positioned for stable financial performance. Business travel has now started to resume and sales are returning to projected levels.

As of August 9, 2022, the Company had cash of $1,143,000. The Company believes that such cash, plus the cash generated from operations, will provide sufficient liquidity to finance the operating activities of Acorn and OmniMetrix at their current level of operations for the foreseeable future and for the twelve months from the issuance of these unaudited condensed consolidated financial statements in particular. The Company may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business.

8

NOTE 4—LEASES

OmniMetrix leases office space and office equipment under operating lease agreements. The office lease has an expiration date of September 30, 2025. The office equipment lease was entered into in April 2019 and has a sixty-month term. Operating lease payments for the six months ended June 30, 2022 and 2021 were $62,000 and $60,000, respectively. Operating lease payments for the three months ended June 30, 2022 and 2021 were $32,000 and $30,000, respectively. The future minimum lease payments on non-cancellable operating leases as of June 30, 2022 using a discount rate of 4.5% are $390,000. The 4.5% discount rate used is the incremental borrowing rate which, as defined in ASC 842, is the rate of interest that a lessee would have to pay to borrow, on a collateralized basis, over a similar term and in a similar economic environment, an amount equal to the lease payments.

Supplemental cash flow information related to leases consisted of the following (in thousands):

	June 30,
	2022		2021
Cash paid for operating lease liabilities	$	62	$	60

Supplemental balance sheet information related to leases consisted of the following:

	2022
Weighted average remaining lease terms for operating leases		3.23 years

The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of June 30, 2022 (in thousands):

	Twelve-month period ended June 30,
2023	$	126
2024		129
2025		131
2026		33
Total undiscounted cash flows		419
Less: Imputed interest		(29	)
Present value of operating lease liabilities (a)	$	390

(a) Includes current portion of $111,000 for operating leases.

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 office space of the Company’s 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia for a monthly sublease payment of $2,375 which includes the base rent plus a pro-rata share of utilities, property taxes and insurance. Fifty percent of any excess rent received above the per square foot amount that the Company pays will be remitted to the Company’s landlord less the allocation of any shared expenses and leasehold improvements specific to the sublease. The Company invested $7,000 on leasehold improvements related to the sublease. Due to the offset of the capital expenditures, the Company has not had any net rent due to its landlord to date related to the sublease. The estimated amount the Company expects to remit to the landlord subsequent to the first twelve months is $6,700 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.

9

	Twelve-month period ended June 30,
2023	$	26
2024		26
2025		26
2026		7
Total undiscounted cash flows	$	85

NOTE 5—COMMITMENTS AND CONTINGENCIES

On August 19, 2019, OmniMetrix entered into an agreement with a software development partner to create and license to OmniMetrix a new software platform and application. Pursuant to this agreement, OmniMetrix paid this partner equal monthly payments over the first seven months of the term of the agreement equal to $200,000 in the aggregate. OmniMetrix will also pay the partner (i) a per-sensor monitoring fee for each sensor connected to the developed technology, or (ii) a percentage of any revenue received above a specified amount per sensor monitored per month in gas applications only. Commencing on January 1, 2021, OmniMetrix paid the partner a quarterly licensing fee of $12,500 which was renegotiated to $4,450 effective October 1, 2021. The annual licensing fee moving forward will be $17,800, which will be paid in quarterly increments of $4,450. The per-sensor monitoring fees have not yet commenced. The initial term of this agreement ends on August 19, 2022 and would have automatically renewed for one-year periods but OmniMetrix delivered a written notice of termination to the other party sixty days prior to the end of the respective term. OmniMetrix is currently working with the software development partner to negotiate more favorable terms.

In addition to the above, the Company has $419,000 in operating lease obligations payable through 2026 and $28,000 in other contractual obligations. The Company also has $920,000 in open purchase order commitments payable through 2022.

NOTE 6—EQUITY

(a) General

At June 30, 2022 the Company had issued and outstanding 39,687,589 shares of its common stock, par value $0.01 per share. Holders of outstanding common stock are entitled to receive dividends when and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company.

The Company is not authorized to issue preferred stock. Accordingly, no preferred stock is issued or outstanding.

(b) Summary Employee Option Information

The Company’s stock option plans provide for the grant to officers, directors and employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money” at the end of the option term, it is automatically exercised “net”. In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee, but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable for one share of the Company’s common stock. Most options expire within five to ten years from the date of the grant, and generally vest over a three-year period from the date of the grant.

At June 30, 2022, 1,434,850 options were available for grant under the Amended and Restated 2006 Stock Incentive Plan and no options were available for grant under the 2006 Stock Option Plan for Non-Employee Directors. During the three months ended June 30, 2022, 50,000 options were issued to the Company’s CFO. During the six months ended June 30, 2022, 30,000 options were issued to directors, 35,000 options were issued to the Company’s CEO, 50,000 options were issued to the Company’s CFO and 30,770 options were issued to other employees. In the six and three months ended June 30, 2022, there were no grants to non-employees (other than the directors, CEO and CFO).

10

No options were exercised in the six and three months ended June 30, 2022. The intrinsic value of options outstanding and of options exercisable at June 30, 2022 was $126,000 and $114,000, respectively. The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages):

	Number of Options (in shares)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2021		833,020	$	0.39	4.7 years	$	291,000
Granted		145,770		0.55
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2022		978,790	$	0.41	4.6 years	$	126,000
Exercisable at June 30, 2022		737,579	$	0.38	4.1 years	$	114,000

The fair value of the options granted of $54,000 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

Risk-free interest rate	1.8	%
Expected term of options	3.9 years
Expected annual volatility	93.6	%
Expected dividend yield	—	%

(c) Stock-based Compensation Expense

Stock-based compensation expense included in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations was $53,000 and $36,000 for the six-month periods ended June 30, 2022 and 2021, respectively and $22,000 and $21,000 for the three-month periods ended June 30, 2022 and 2021, respectively.

The total compensation cost related to non-vested awards not yet recognized was $59,000 as of June 30, 2022.

(d) Warrants

The Company previously issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows:

	Number of Warrants (in shares)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life
Outstanding at December 31, 2021		35,000	$	0.13	14.5 months
Granted		—		—
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2022		35,000	$	0.13	8.5 months

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NOTE 7— SEGMENT REPORTING

As of June 30, 2022, the Company operates in two reportable operating segments, both of which are performed through the Company’s OmniMetrix subsidiary:

● The PG (Power Generation) (“PG”) segment provides wireless remote monitoring and control systems and services for critical assets as well as Internet of Things applications. The PG segment includes OmniMetrix’s monitoring device for industrial air compressors and dryers, and a line of annunciators.

● The CP (Cathodic Protection) (“CP”) segment provides remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies.

The Company’s reportable segments are strategic business units, offering different products and services, and are managed separately as each business requires different technology and marketing strategies.

The following tables represent segmented data for the six-month and three-month periods ended June 30, 2022 and 2021 (in thousands):

	PG		CP			Total
Six months ended June 30, 2022:
Revenues from external customers	$	2,825	$	547		$	3,372
Segment gross profit		2,164		340			2,504
Depreciation and amortization		41		8			49
Segment income (loss) before income taxes*	$	262	$	(45	)	$	217
Six months ended June 30, 2021:
Revenues from external customers	$	2,837	$	479		$	3,316
Segment gross profit		2,150		282			2,432
Depreciation and amortization		32		5			37
Segment income (loss) before income taxes	$	510	$	(17	)	$	493
Three months ended June 30, 2022:
Revenues from external customers	$	1,380	$	241		$	1,621
Segment gross profit		1,091		155			1,246
Depreciation and amortization		24		5			29
Segment income (loss) before income taxes*	$	73	$	(24	)	$	49
Three months ended June 30, 2021:
Revenues from external customers	$	1,379	$	232		$	1,611
Segment gross profit		1,082		140			1,222
Depreciation and amortization		19		3			22
Segment income (loss) before income taxes	$	234	$	(4	)	$	230

* The software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Segment income (loss) before income taxes” for the six and three months ended June 30, 2022.

The Company does not currently break out total assets by reportable segment as there is a high level of shared utilization between the segments. Further, the Chief Decision Maker does not review the assets by segment.

12

Reconciliation of Segment (Loss) Income to Consolidated Net (Loss) Income Before Income Taxes

	Six months ended June 30,						Three months ended June 30,
	2022			2021			2022			2021
Total net income before income taxes for reportable segments*	$	217		$	493		$	49		$	230
Unallocated cost of corporate headquarters		(510	)		(467	)		(220	)		(226	)
Consolidated net (loss) income before income taxes	$	(293	)	$	26		$	(171	)	$	4

* The software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Total net income before income taxes for reportable segments” for the six and three months ended June 30, 2022.

NOTE 8—REVENUE

The following table disaggregates the Company’s revenue for the six-month and three-month periods ended June 30, 2022 and 2021 (in thousands):

	Hardware		Monitoring		Total
Six months ended June 30, 2022:
PG Segment	$	1,002	$	1,823	$	2,825
CP Segment		414		133		547
Total Revenue	$	1,416	$	1,956	$	3,372

	Hardware		Monitoring		Total
Six months ended June 30, 2021:
PG Segment	$	942	$	1,895	$	2,837
CP Segment		349		130		479
Total Revenue	$	1,291	$	2,025	$	3,316

	Hardware		Monitoring		Total
Three months ended June 30, 2022:
PG Segment	$	479	$	901	$	1,380
CP Segment		176		65		241
Total Revenue	$	655	$	966	$	1,621

	Hardware		Monitoring		Total
Three months ended June 30, 2021:
PG Segment	$	425	$	954	$	1,379
CP Segment		169		63		232
Total Revenue	$	594	$	1,017	$	1,611

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Deferred revenue activity for the six months ended June 30, 2022 can be seen in the table below (in thousands):

	Hardware			Monitoring			Total
Balance at December 31, 2021	$	3,268		$	2,125		$	5,393
Additions during the period		1,282			1,943			3,225
Recognized as revenue		(1,027	)		(1,956	)		(2,983	)
Balance at June 30, 2022	$	3,523		$	2,112		$	5,635
Amounts to be recognized as revenue in the twelve-month-period ending:
June 30, 2023	$	1,839		$	1,803		$	3,642
June 30, 2024		1,270			304			1,574
June 30, 2025 and thereafter		414			5			419
	$	3,523		$	2,112		$	5,635

Other revenue of $389,000, is related to accessories, repairs, and other miscellaneous charges that are recognized to revenue when sold and are not deferred.

Deferred charges relate only to the sale of equipment. Deferred charges activity for the six months ended June 30, 2022 can be seen in the table below (in thousands):

Balance at December 31, 2021	$	1,513
Additions, net of adjustments, during the period		601
Recognized as cost of sales		(484	)
Balance at June 30, 2022	$	1,630
Amounts to be recognized as cost of sales in the twelve-month-period ending:
June 30, 2023	$	858
June 30, 2024		581	*
June 30, 2025 and thereafter		191	*
	$	1,630

Other cost of goods sold (COGS) recognized of $227,000 is related to accessories, repairs, and other miscellaneous charges that are recognized to revenue when sold and are not deferred, in addition to $157,000 in monitoring COGS which is not deferred.

The following table provides a reconciliation of the Company’s sales commissions contract assets for the six-month period ended June 30, 2022 (in thousands):

	Hardware			Monitoring			Total
Balance at December 31, 2021	$	242		$	53		$	295
Additions during the period		94			20			114
Amortization of sales commissions		(71	)		(13	)		(84	)
Balance at June 30, 2022	$	265		$	60		$	325

The capitalized sales commissions are included in other current assets ($159,000) and other assets ($166,000) in the Company’s unaudited condensed consolidated balance sheets as of June 30, 2022. The capitalized sales commissions are included in other current assets ($138,000) and other assets ($157,000) in the Company’s consolidated balance sheets as of December 31, 2021.

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NOTE 9—RELATED PARTY BALANCES AND TRANSACTIONS

Officer and Director Fees

The Company recorded fees to officers of $261,000 and $256,000 for the six months ended June 30, 2022 and 2021, respectively, and $131,000 and $129,000 for the three months ended June 30, 2022 and 2021, respectively, which is included in selling, general and administrative expenses.

The Company recorded fees to directors of $30,000 for the six months ended June 30, 2022 and 2021, and $15,000 for the three months ended June 30, 2022 and 2021, which is included in selling, general and administrative expenses.

Intercompany

The related party balance due to Acorn from OmniMetrix for amounts loaned, accrued interest and expenses paid by Acorn on OmniMetrix’s behalf was $3,661,000 as of June 30, 2022 as compared to $4,217,000 as of December 31, 2021. This balance is eliminated in consolidation. During the six months ended June 30, 2022, the intercompany amount due to Acorn from OmniMetrix decreased by $556,000. This included repayments of $780,000 offset by interest of $89,000, dividends of $38,000 due to Acorn and $97,000 in shared expenses paid by Acorn. During the six months ended June 30, 2021, the intercompany amount due to Acorn from OmniMetrix decreased by $157,000. This included repayments of $345,000 offset by interest of $104,000, dividends of $38,000 due to Acorn and $46,000 in shared expenses paid by Acorn.

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ACORN ENERGY, INC.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Form 10-Q contains “forward-looking statements” relating to the Company which represent the Company’s current expectations or beliefs including, but not limited to, statements concerning the Company’s operations, performance, financial condition and growth. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as “may”, “anticipate”, “intend”, “could”, “estimate” or “continue” or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel, variability of quarterly results, and the ability of the Company to continue its growth strategy and the Company’s competition, certain of which are beyond the Company’s control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, or any of the other risks set out under the caption “Risk Factors” in the Company’s 10-K report for the year ended December 31, 2021 occur, actual outcomes and results could differ materially from those indicated in the forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

All dollar amounts in the discussion below are rounded to the nearest thousand and, thus, are approximate.

FINANCIAL RESULTS BY COMPANY

The following table shows, for the periods indicated, the financial results (dollar amounts in thousands) attributable to each of our consolidated companies. In the tables and discussion below, research and development expense is referred to as “R&D expense,” and selling, general and administrative expense is referred to as “SG&A expense.”

	Six months ended June 30, 2022
	OmniMetrix			Acorn			Total
Revenue	$	3,372		$	—		$	3,372
Cost of sales		868			—			868
Gross profit		2,504			—			2,504
Gross profit margin		74	%					74	%
R&D expense		410			—			410
SG&A expense		1,877			510			2,387
Impairment of software		51			—			51
Operating income (loss)	$	166		$	(510	)	$	(344	)

	Six months ended June 30, 2021
	OmniMetrix			Acorn			Total
Revenue	$	3,316		$	—		$	3,316
Cost of sales		884			—			884
Gross profit		2,432			—			2,432
Gross profit margin		73	%					73	%
R&D expense		353			—			353
SG&A expense		1,581			467			2,048
Operating income (loss)	$	498		$	(467	)	$	31

16

	Three months ended June 30, 2022
	OmniMetrix			Acorn			Total
Revenue	$	1,621		$	—		$	1,621
Cost of Sales		375			—			375
Gross profit		1,246			—			1,246
Gross profit margin		77	%					77	%
R&D expense		212			—			212
SG&A expense		985			220			1,205
Impairment of software		51			—			51
Operating loss	$	(2	)	$	(220	)	$	(222	)

	Three months ended June 30, 2021
	OmniMetrix			Acorn			Total
Revenue	$	1,611		$	—		$	1,611
Cost of Sales		389			—			389
Gross profit		1,222			—			1,222
Gross profit margin		76	%					76	%
R&D expense		175			—			175
SG&A expense		816			226			1,042
Operating income (loss)	$	231		$	(226	)	$	5

BACKLOG

As of June 30, 2022, our backlog of work to be completed (primarily deferred revenue) at our OmniMetrix subsidiary totaled $5,635,000.

RECENT DEVELOPMENTS

On January 1, 2022, 30,000 options in the aggregate were issued to directors with an exercise price of $0.63 and that vest in equal increments on January 1, 2022, April 1, 2022, July 1, 2022 and October 1, 2022, valued at $12,100 in the aggregate.

On January 1, 2022, 35,000 options were issued to the CEO with an exercise price of $0.63 and that vest in equal increments on January 1, 2022, April 1, 2022, July 1, 2022 and October 1, 2022, valued at $14,100.

On March 4, 2022, 30,770 options were issued to the Vice President of Sales with an exercise price of $0.55 and that vest in equal increments over three years on the anniversary date of the grant. These options are valued at $11,400.

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

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

In July 2022, we announced a partnership between OmniMetrix, CPower Energy Management (“CPower”), and Power Solutions Specialists TX (“PSS”) designed to help homeowners that install next-generation standby generators to earn compensation for offering grid relief, known as “demand response,” to the Electric Reliability Council of Texas (“ERCOT”). CPower’s demand response solutions, combined with OmniMetrix’s remote control capabilities, allow the shifting of electricity production to PSS’s best-in-class residential standby generators for a few hours each year when the grid is stressed or ERCOT energy pricing is high, without the homeowner needing to take any action. Homeowners are compensated for signing up and possibly supplying grid offload by running their generators for up to 12 hours per year. We do not expect this partnership to begin generating revenue until 2023.

17

On August 19, 2019, we entered into an agreement with a software development partner to create and license to us a new software platform and application. Pursuant to this agreement, we paid this partner equal monthly payments over the first seven months of the term of the agreement equal to $200,000 in the aggregate. We will also pay the partner (i) a per-sensor monitoring fee for each sensor connected to the developed technology, or (ii) a percentage of any revenue received above a specified amount per sensor monitored per month, in gas applications only. Commencing on January 1, 2021, we paid the partner a quarterly licensing fee of $12,500 which was renegotiated to $4,450 effective October 1, 2021. The annual licensing fee moving forward will be $17,800, which will be paid in quarterly increments of $4,450. The per-sensor monitoring fees have not yet commenced. The initial term of this agreement ends on August 19, 2022 and would have automatically renewed for one-year periods but we delivered a written notice of termination to the other party sixty days prior to the end of the respective term. We are currently working with the software development partner to negotiate more favorable terms.

We entered into a new agreement effective May 1, 2020 for data hosting services, replacing an expiring agreement with the same vendor. The agreement had a twelve-month term. In January 2021, we elected to renew this agreement for an additional twelve months under the same terms, extending the agreement to April 30, 2022. We did not extend this agreement for an additional one-year term beyond the expiration of the previous term on April 30, 2022 and are currently under a month-to-month arrangement which we intend to terminate by the end of the third quarter of 2022. Under the applicable data hosting services agreements, we paid $38,000 and $42,000 for the three-month periods ended June 30, 2022 and 2021, respectively, and $80,000 and $79,000 for the six-month periods ended June 30, 2022 and 2021, respectively.

On March 17, 2021, we entered into a master services agreement for the development of a new user interface for our customer data portal. The cost of this project is $119,000 in design and development services ($14,000 was paid at the commencement of this project and three equal installments of $23,000 were paid monthly starting in July 2021 with the fourth and final installment to be paid upon completion and launch of the new interface). This project is substantially completed and the launch of the new customer portal is expected to occur by the end of 2022. The cost of this project is capitalized, and amortization will begin once the new interface is completed and ready to deploy.

The master services agreement also covers the design, set-up and deployment of a new Microsoft Azure cloud infrastructure to host our OmniView data servers which replaces our existing Peak 10 datacenter hosting environment. The new infrastructure provides a more modern, agile and cost-effective environment in which to grow our IoT connections and services. We invested $166,000 in this initiative during the year ended December 31, 2021 and $260,000 in the six months ended June 30, 2022, of which $116,000 was invested in the three months ended June 30, 2022. The new Microsoft Azure cloud infrastructure environment was completed and launched on May 1, 2022. The cost of this project is capitalized, and amortization over an estimated useful life of seven years began on May 1, 2022.

OVERVIEW AND TREND INFORMATION

Acorn Energy, Inc. (“Acorn” or “the Company”) is a holding company focused on technology-driven solutions for energy infrastructure asset management. We provide the following services and products through our OmniMetrix^TM, LLC (“OmniMetrix”) subsidiary:

● Power Generation (“PG”) monitoring. OmniMetrix’s PG activities provide wireless remote monitoring and control systems and services for critical assets as well as Internet of Things applications. The PG segment includes our monitoring device for industrial air compressors and dryers, and a line of annunciators.

● Cathodic Protection (“CP”) monitoring. OmniMetrix’s CP segment provides remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies.

Each of our PG and CP activities represents a reportable segment. The following analysis should be read together with the segment and revenue information provided in Notes 7 and 8 to the unaudited condensed consolidated financial statements included in this quarterly report.

OmniMetrix

OmniMetrix is a Georgia limited liability company based in Buford, Georgia that develops and markets wireless remote monitoring and control systems and services for multiple markets in the Internet of Things (“IoT”) ecosystem: critical assets (including stand-by power generators, pumps, pumpjacks, light towers, turbines, compressors, and other industrial equipment) as well as cathodic protection for the pipeline industry (gas utilities and pipeline companies). Acorn owns 99% of OmniMetrix with 1% owned by the former CEO of OmniMetrix.

Following the emergence of machine-to-machine (M2M) and IoT applications, whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this new economic ecosystem. In addition, OmniMetrix sees 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, cybersecurity threats, and other issues related to the reliability of the electric power grid. As residential 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, and given that OmniMetrix monitors all major brands of critical equipment, OmniMetrix believes it is well-positioned as a competitive participant in this market.

18

Sales of OmniMetrix monitoring systems include the sale of equipment and of monitoring services. Revenue (and related costs) associated with sale of equipment are recorded to deferred revenue (and deferred charges) upon shipment for PG and CP monitoring units. Revenue and related costs with respect to the sale of equipment are recognized over the estimated life of the units which are currently estimated to be three years. Revenues from the prepayment of monitoring fees (generally paid twelve months in advance) are initially recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period.

Results of Operations

The following table sets forth certain information with respect to the unaudited condensed consolidated results of operations of the Company for the six-month periods ended June 30, 2022 and 2021, including the percentage of total revenues during each period attributable to selected components of the operations statement data and for the period-to-period percentage changes in such components. For segment data, see Notes 7 and 8 to the unaudited condensed consolidated financial statements included in this quarterly report. The fluctuation discussion that follows the tables contain dollar amounts that are rounded to the nearest thousand, thus, they are approximate.

	Six months ended June 30,
	2022						2021						Change
	($,000)			% of revenues			($,000)			% of revenues			from 2021 to 2022
Revenue	$	3,372			100	%	$	3,316			100	%		2	%
Cost of sales		868			26	%		884			27	%		(2	)%
Gross profit		2,504			74	%		2,432			73	%		3	%
R&D expense		410			12	%		353			11	%		16	%
SG&A expense		2,387			71	%		2,048			62	%		17	%
Impairment of software		51			2	%		—			—	%		100	%
Operating (loss) income		(344	)		(10	)%		31			1	%		(1210	)%
Finance expense, net		(1	)		*	%		(5	)		*	%		(80	)%
(Loss) income before income taxes		(345	)		(10	)%		26			1	%		(1,427	)%
Income tax expense		—			—			—			—	%		—
Net (loss) income		(345	)		(10	)%		26			1	%		(1,427	)%
Non-controlling interest share of net income		(1	)		*	%		(4	)		*	%		(125	)%
Net (loss) income attributable to Acorn Energy, Inc.	$	(346	)		(10	)%	$	22			1	%		(1,673	)%

*result is less than 1%.

The following table sets forth certain information with respect to the unaudited consolidated results of operations of the Company for the three-month periods ended June 30, 2022 and 2021, including the percentage of total revenues during each period attributable to selected components of the operations statement data and for the period-to-period percentage changes in such components. For segment data, see Notes 7 and 8 to the unaudited condensed consolidated financial statements included in this quarterly report.

19

	Three months ended June 30,
	2022						2021						Change
	($,000)			% of revenues			($,000)			% of revenues			from 2021 to 2022
Revenue	$	1,621			100	%	$	1,611			100	%		1	%
Cost of sales		375			23	%		389			24	%		(4	)%
Gross profit		1,246			77	%		1,222			76	%		2	%
R&D expense		212			13	%		175			11	%		21	%
SG&A expense		1,205			74	%		1,042			65	%		16	%
Impairment of software		51			3	%		—			—	%		100	%
Operating (loss) income		(222	)		(14	)%		5			*	%		(4,540	)%
Finance expense, net		(1	)		—	%		(1	)		*	%		—	%
(Loss) Income before income taxes		(223	)		(14	)%		4			*	%		(5,675	)%
Income tax expense		—			—	%		—			—	%		—	%
Net (loss) income		(223	)		(14	)%		4			*	%		(5,675	)%
Non-controlling interest share of net (loss) income		**			*	%		(2	)		*	%		(100	)%
Net (loss) income attributable to Acorn Energy, Inc.	$	(223	)		(14	)%	$	2			*	%		(11,450	)%

*result is less than 1%.

**less than $1

Revenue for the six and three months ended June 30, 2022 and 2021

In the six months ended June 30, 2022, revenue increased by $56,000, or 2%, from $3,316,000 in the six months ended June 30, 2021 to $3,372,000 in the six months ended June 30, 2022. Hardware revenue increased by $125,000 from $1,291,000 in the six months ended June 30, 2021 to $1,416,000 in the six months ended June 30, 2022. During the six months ended June 30, 2021, we recorded $112,000 in revenue from the sale of custom TG Pro units that are designed to large customer specifications and monitored by the customer and thus the revenue was not deferred. We did not have any custom unit orders in the first six months ended June 30, 2022. The hardware revenue during the six months ended June 30, 2021, excluding the revenue from the sale of the custom units, was $1,179,000; thus, the increase in hardware revenue excluding the custom units was 20%. This increase was attributed to Hero-2 and TG Pro revenue increases as well as from service income realized offset by a decrease in revenue from the TG-2 product. Monitoring revenue decreased by $69,000, or 3%, from $2,025,000 in the six months ended June 30, 2021 to $1,956,000 in the six months ended June 30, 2022. The decrease in monitoring revenue was due to the impact of the connections for which monitoring was discontinued as a result of the sunsetting 3G technology.

As discussed above, OmniMetrix has two reportable segments, PG and CP. Of the $3,372,000 in revenue recognized in the six months ended June 30, 2022, $2,825,000 was generated by PG activities and $547,000 was generated by CP activities. This represents a decrease in revenue from PG activities of $12,000, or 0.4%, from $2,837,000 in the six months ended June 30, 2021, and an increase in revenue from CP activities of $68,000, or 14%, from $479,000 in the six months ended June 30, 2021. As noted above, the decrease in PG revenue was due to the impact of the PG connections for which monitoring was discontinued in the six months ended June 30, 2022 as a result of sunsetting 3G technology.

Revenue increased by $10,000, or 1%, from $1,611,000 in the three months ended June 30, 2021 to $1,621,000 in the three months ended June 30, 2022. Revenue was essentially flat period over period which we attribute to sales timing with significantly higher sales in first quarter 2022 that contributed to a slow down in purchasing in the second quarter 2022 in addition to concerns related to inflation and related to rising interest rates and gas prices.

20

Monitoring revenue decreased by $51,000, or 5%, from $1,017,000 in the three months ended June 30, 2021 to $966,000 in the three months ended June 30, 2022. The decrease is due to the same drivers in the six-month period as previously discussed.

Of the $1,621,000 in revenue recognized in the three months ended June 30, 2022, $1,380,000 was generated by PG activities and $241,000 was generated by CP activities. Revenue from PG activities was relatively flat period-over-period, only increasing $1,000 from $1,379,000 in the three months ended June 30, 2021. Revenue from CP activities increased $9,000, or 9%, from $232,000 in the three months ended June 30, 2021.

Gross profit for the six and three months ended June 30, 2022 and 2021

Gross profit for the six months ended June 30, 2022 was $2,504,000, reflecting a gross margin of 74%, compared with a gross profit of $2,432,000, reflecting a 73% gross margin, for the six months ended June 30, 2021. Gross margin on hardware revenue for the six months ended June 30, 2022 was 50% compared to 46% for the six months ended June 30, 2021. Gross margin on monitoring revenue for the six months ended June 30, 2022 was 92% compared to 91% for the six months ended June 30, 2021.

Gross profit for the three months ended June 30, 2022 was $1,246,000, reflecting a gross margin of 77% on revenue, compared with a gross profit for the three months ended June 30, 2021 of $1,222,000, reflecting a gross margin of 76% on revenue. Gross margin on hardware revenue for the three months ended June 30, 2022 was 55% compared to 43% for the three months ended June 30, 2021. This was attributed to revenue from custom engineering fees, accessory sales, product mix and certain price increases during the period. Gross margin on monitoring revenue for the three months ended June 30, 2022 was 92% compared to 95% for the three months ended June 30, 2021.

Operating expenses for the six and three months ended June 30, 2022 and 2021

OmniMetrix R&D expense. During the six months ended June 30, 2022 and 2021, R&D expense was $410,000 and $353,000, respectively. During the three months ended June 30, 2022, OmniMetrix recorded $212,000 of R&D expense as compared to $175,000 in the three months ended June 30, 2021. The increase in R&D expense in the six months ended June 30, 2022 of $57,000 and the increase of $37,000 for the three months ended June 30, 2022 are both related to salary increases of our engineering team effective September 1, 2021, the continued development of next generation PG and CP products and exploration into new possible product lines. We expect a moderate increase in R&D expense for the remainder of 2022 as we continue to work on certain initiatives to redesign products and expand product lines to increase the level of innovation.

OmniMetrix SG&A expense. During the six months ended June 30, 2022, OmniMetrix recorded SG&A expense of $1,877,000 compared to SG&A costs of $1,581,000 in the six months ended June 30, 2021, an increase of $296,000, or 19%. During the three months ended June 30, 2022, OmniMetrix recorded SG&A expense of $985,000 compared to SG&A costs of $816,000 in the three months ended June 30, 2021, an increase of $169,000, or 21%. The increase in the six-month period was primarily due to an increase of (i) $109,000 in personnel expenses which included partial year bonuses of $16,000 which were not paid in 2021, (ii) $23,000 in travel and trade show expenses, (iii) $94,000 in technology consulting fees and software license fees, (iv) $24,000 in contractor expenses, (v) $26,000 in amortization of sales commissions and (vi) $20,000 in aggregate increases across other expense categories. The increase in the three-month period was primarily due to an increase of (i) $50,000 in personnel expenses which included the partial year bonuses noted above of $16,000 that were not paid in the second quarter of 2021, (ii) $78,000 in technology consulting fees and software license fees, and (iii) $41,000 in aggregate increases across other expense categories.

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

Corporate SG&A expense. Corporate SG&A expense was $510,000 in the six months ended June 30, 2022, an increase of $43,000, or 9%, from the $467,000 of corporate SG&A expense reported in the six months ended June 30, 2021. This increase is primarily due to increased stock compensation expense, audit fees and insurance costs. Corporate SG&A expense for the three months ended June 30, 2022 decreased $6,000, or 3%, to $220,000 from $226,000 in the three months ended June 30, 2021. Second quarter 2022 corporate SG&A expense of $220,000 was lower by $70,000 than first quarter 2022 corporate SG&A expense of $290,000, primarily due to expenses related to our annual audit which were incurred in the first quarter 2022. We do not expect the quarterly corporate overhead to change materially except as may be required to support the growth of our OmniMetrix subsidiary and typical annual increases in professional fees and insurance premiums.

21

Net (loss) income attributable to Acorn Energy. We recognized net loss attributable to Acorn shareholders of $346,000 in the six months ended June 30, 2022 compared to net income attributable to Acorn shareholders of $22,000 in the six months ended June 30, 2021. Our net income during the six months ended June 30, 2022 is comprised of net income at OmniMetrix of $167,000 offset by corporate expenses, including net interest expense, of $512,000 and the non-controlling interest share of our income from OmniMetrix of $1,000. Our net income in the six months ended June 30, 2021 was comprised of net income at OmniMetrix of $493,000 offset by corporate expenses of $467,000 and the non-controlling interest share of our income from OmniMetrix of $4,000.

For the three months ended June 30, 2022, we recognized net loss attributable to Acorn shareholders of $223,000 compared to net income attributable to Acorn shareholders of $2,000 for the three months ended June 30, 2021. Our net loss in the three months ended June 30, 2022 is comprised of net loss at OmniMetrix of $1,000 plus corporate expenses of $222,000. The non-controlling interest share of OmniMetrix during this period rounded to zero. Our net income in the three months ended June 30, 2021 was comprised of net income at OmniMetrix of $230,000 offset by corporate expenses of $226,000 and less the $2,000 attributed to the non-controlling interest share of our income in OmniMetrix.

Liquidity and Capital Resources

At June 30, 2022, we had negative working capital of $455,000. Our working capital includes $1,259,000 of cash and deferred revenue of $3,642,000. The deferred revenue does not require significant cash outlay for the revenue to be recognized.

During the six months ended June 30, 2022, our OmniMetrix subsidiary provided $371,000 from operations while our corporate headquarters used $565,000 during the same period.

During the six months ended June 30, 2022, we invested $266,000 in technology, primarily in the design of our new cloud server environment as well as investments in new hardware and software upgrades. In addition, we had other capital expenditures of $3,000 related to patent filings and minor leasehold improvements.

Other Liquidity Matters

OmniMetrix owes Acorn $3,660,000 for loans, accrued interest and expenses advanced to it by Acorn. OmniMetrix made repayments to Acorn of $780,000 in the first half of 2022 offset by interest, dividends and other advances of $224,000 in the aggregate.

As of August 9, 2022, we had cash of $1,143,000. We believe that such cash, plus the cash generated from operations, will provide sufficient liquidity to finance the operating activities of Acorn and OmniMetrix at their current level of operations for the foreseeable future and for the twelve months from the issuance of these unaudited condensed consolidated financial statements in particular. We may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business.

22

Contractual Obligations and Commitments

The table below provides information concerning obligations under certain categories of our contractual obligations as of June 30, 2022.

CASH PAYMENTS DUE TO CONTRACTUAL OBLIGATIONS

	Twelve Month Periods Ending June 30, (in thousands)
	Total		2023		2024-2025		2026-2027		2028 and thereafter
Software agreements	$	17	$	17	$	—	$	—	$	—
Operating leases		419		126		260		33		—
Contractual services		13		8		5		—		—
Total contractual cash obligations	$	449	$	151	$	265	$	33	$	—

The Company also has $920,000 in open purchase order commitments payable through 2022.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

COVID-19 Risk

The COVID-19 pandemic could negatively affect various aspects of our business, including our workforce and supply chain, and make it more difficult and expensive to meet our obligations to our customers, and could result in reduced demand from our customers.

The outbreak of the COVID-19 pandemic caused governments around the world to implement quarantines of certain geographic areas and implement significant restrictions on travel. Several governments also implemented work restrictions that prohibit many employees from going to work, both around the world as well as in certain jurisdictions in the United States. At this time, it is unclear if foreign governments or U.S. federal, state or local governments will further extend any of the current restrictions or if further restrictions will be put into place. In addition, many countries, including the United States, have placed significant bans on international travel. It is possible that restrictions or bans on domestic travel may be implemented by U.S. federal, state or local governments. As a result of the pandemic, businesses can be shut down, supply chains can be interrupted, slowed, or rendered inoperable, and individuals can become ill, quarantined, or otherwise unable to work and/or travel due to health reasons or governmental restrictions. OmniMetrix is considered an essential business due to the fact that it provides infrastructure support to both government and commercial sectors and across key industries, so it has not been forced to shut down to date.

Governmental mandates may require forced shutdowns of our facilities for extended or indefinite periods. In addition, the pandemic could adversely affect our workforce resulting in serious health issues and absenteeism. The pandemic could also substantially interfere with general commercial activity related to our supply chain and customer base, which could have a material adverse effect on our financial condition, results of operations, business, or prospects. Some of the electronic devices and hardware we purchase, like antennas, radios, and GPS modules are very specific to our application; there are not likely to be practical alternatives. In some cases, our circuit boards were designed around specific electronic hardware that met our specifications. We are working closely with our contract manufacturers and suppliers in order to mitigate as much as possible the risks to our supply chain for these critical devices and hardware, including identifying any lead-time issues and any potential alternate sources. We are also examining all currently open purchase orders in an effort to identify whether we need to issue additional orders to secure product that is critical, already has questionable lead times and/or is unique to our requirements.

Concentrations of Credit Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade accounts receivable. Our cash was deposited with a U.S. bank and amounted to $1,259,000 at June 30, 2022. We do not believe there is significant risk of non-performance by these counterparties. For the six- and three-month periods ended June 30, 2022, there were no customers that represented greater than 10% of our total invoiced sales or of our accounts receivable at June 30, 2022. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising our customer base.

23

Fair Value of Financial Instruments

Fair values of financial instruments included in current assets and current liabilities are estimated to approximate their book values due to the short maturity of such investments.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to material weaknesses noted in our Annual Report on Form 10-K for the year ended December 31, 2021, to ensure that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) accumulated and communicated to our management (including our Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

As noted in our Annual Report on Form 10-K for the year ended December 31, 2021, we employ a decentralized internal control methodology, coupled with management’s oversight, whereby our OmniMetrix subsidiary is responsible for mitigating its risks to financial reporting by implementing and maintaining effective control policies and procedures and subsequently translating that respective risk mitigation up and through to the parent level and to our external financial statements. In addition, as our operating subsidiary is not large enough to effectively mitigate certain risks by segregating incompatible duties, management must employ compensating mechanisms throughout our company in a manner that is feasible within the constraints in which it operates.

The material weaknesses management identified were caused by an insufficient complement of resources at our OmniMetrix subsidiary and limited IT system capabilities, such that individual control policies and procedures at the subsidiary could not be implemented, maintained, or remediated when and where necessary. As a result, a majority of the significant process areas management identified for our OmniMetrix subsidiary had one or more material weaknesses present.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

24

PART II

ITEM 6. EXHIBITS.

10.1*	Amended and Restated Consulting Agreement, dated June 1, 2022, by and between the Registrant and Tracy Clifford Consulting, LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 10-Q, filed June 1, 2022).
#31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
#31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
#32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
#32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
#101.1	The following financial statements from Acorn Energy’s Form 10-Q for the quarter ended June 30, 2022, filed on August 12, 2022, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Changes in Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.
*	This exhibit includes a management contract, compensatory plan or arrangement in which one or more directors or executive officers of the Registrant participate.
#	This exhibit is filed or furnished herewith.

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by its principal financial officer thereunto duly authorized.

	ACORN ENERGY, INC.
Dated: August 12, 2022
	By:	/s/ TRACY S. CLIFFORD
		Tracy S. Clifford
		Chief Financial Officer

26

EX-31.1

Exhibit 31.1

I, Jan H. Loeb, the Chief Executive Officer of Acorn Energy, Inc., certify that:

1.	I have reviewed this report on Form 10-Q of Acorn Energy, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 12, 2022

By:	/s/ JAN H. LOEB
	Jan H. Loeb
	Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Tracy S. Clifford, the Chief Financial Officer of Acorn Energy, Inc., certify that:

1.	I have reviewed this report on Form 10-Q of Acorn Energy, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 12, 2022

By:	/s/ TRACY S. CLIFFORD
	Tracy S. Clifford
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Acorn Energy, Inc. (the “Company”) for the quarterly period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jan H. Loeb, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Jan H. Loeb

Jan H. Loeb

Chief Executive Officer

August 12, 2022

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Acorn Energy, Inc. (the “Company”) for the quarterly period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracy S. Clifford, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Tracy S. Clifford

Tracy S. Clifford

Chief Financial Officer

August 12, 2022

XML

Cover - shares	6 Months Ended
	Jun. 30, 2022	Aug. 09, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2022
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	001-33886
Entity Registrant Name	ACORN ENERGY, INC.
Entity Central Index Key	0000880984
Entity Tax Identification Number	22-2786081
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1000 N West Street
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19801
City Area Code	410
Local Phone Number	654-3315
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		39,687,589

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash	$ 1,259,000	$ 1,722,000
Accounts receivable, net	584,000	876,000
Inventory, net	915,000	617,000
Deferred cost of goods sold	858,000	799,000
Other current assets	221,000	229,000
Total current assets	3,837,000	4,243,000
Property and equipment, net	687,000	517,000
Right-of-use assets, net	349,000	399,000
Deferred cost of goods sold	772,000	714,000
Other assets	178,000	169,000
Total assets	5,823,000	6,042,000
Current liabilities:
Accounts payable	340,000	457,000
Accrued expenses	156,000	164,000
Deferred revenue	3,642,000	3,541,000
Current operating lease liabilities	111,000	107,000
Other current liabilities	43,000	34,000
Total current liabilities	4,292,000	4,303,000
Long-term liabilities:
Deferred revenue	1,993,000	1,852,000
Long-term operating lease liabilities	279,000	336,000
Other long-term liabilities	14,000	12,000
Total long-term liabilities	2,286,000	2,200,000
Commitments and contingencies (Note 5)
Acorn Energy, Inc. shareholders
Common stock - $0.01 par value per share: Authorized – 42,000,000 shares; Issued – 39,687,589 shares at June 30, 2022 and December 31, 2021	397,000	397,000
Additional paid-in capital	102,857,000	102,804,000
Accumulated deficit	(100,980,000)	(100,634,000)
Treasury stock, at cost – 801,920 shares at June 30, 2022 and December 31, 2021	(3,036,000)	(3,036,000)
Total Acorn Energy, Inc. shareholders’ deficit	(762,000)	(469,000)
Non-controlling interest	7,000	8,000
Total deficit	(755,000)	(461,000)
Total liabilities and deficit	$ 5,823,000	$ 6,042,000

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	42,000,000	42,000,000
Common stock, shares issued	39,687,589	39,687,589
Treasury stock, shares	801,920	801,920

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2022		Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Revenue	$ 1,621		$ 1,611	$ 3,372	$ 3,316
Cost of sales	375		389	868	884
Gross profit	1,246		1,222	2,504	2,432
Operating expenses:
Research and development expense	212		175	410	353
Selling, general and administrative expense	1,205		1,042	2,387	2,048
Impairment of software	51			51
Total operating expenses	1,468		1,217	2,848	2,401
Operating (loss) income	(222)		5	(344)	31
Finance expense, net	(1)		(1)	(1)	(5)
(Loss) income before income taxes	(223)		4	(345)	26
Income tax expense
Net (loss) income	(223)		4	(345)	26
Non-controlling interest share of net income		[1]	(2)	(1)	(4)
Net (loss) income attributable to Acorn Energy, Inc. shareholders	$ (223)		$ 2	$ (346)	$ 22
Basic and diluted net (loss) income per share attributable to Acorn Energy, Inc. shareholders:	$ (0.01)		$ 0.00	$ (0.01)	$ 0.00
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders – basic and diluted
Basic	39,688		39,688	39,688	39,688
Diluted	39,688		39,936	39,688	39,914

[1] Less than $1

XML

Condensed Consolidated Statements of Changes in Deficit (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Parent [Member]	Noncontrolling Interest [Member]
Balances as of March 31, 2021 at Dec. 31, 2020	$ (519)	$ 397	$ 102,729	$ (100,613)	$ (3,036)	$ (523)	$ 4
Beginning balance, shares at Dec. 31, 2020		39,688			802
Net income (loss)	22			20		20	2
Accrued dividend in OmniMetrix preferred shares	(1)						(1)
Stock option compensation	15		15			15
Ending balance at Mar. 31, 2021	(483)	$ 397	102,744	(100,593)	$ (3,036)	(488)	5
Ending balance, shares at Mar. 31, 2021		39,688			802
Balances as of March 31, 2021 at Dec. 31, 2020	(519)	$ 397	102,729	(100,613)	$ (3,036)	(523)	4
Beginning balance, shares at Dec. 31, 2020		39,688			802
Net income (loss)	26
Ending balance at Jun. 30, 2021	(459)	$ 397	102,765	(100,591)	$ (3,036)	(465)	6
Ending balance, shares at Jun. 30, 2021		39,688			802
Balances as of March 31, 2021 at Mar. 31, 2021	(483)	$ 397	102,744	(100,593)	$ (3,036)	(488)	5
Beginning balance, shares at Mar. 31, 2021		39,688			802
Net income (loss)	4			2		2	2
Accrued dividend in OmniMetrix preferred shares	(1)						(1)
Stock option compensation	21		21			21
Ending balance at Jun. 30, 2021	(459)	$ 397	102,765	(100,591)	$ (3,036)	(465)	6
Ending balance, shares at Jun. 30, 2021		39,688			802
Balances as of March 31, 2021 at Dec. 31, 2021	(461)	$ 397	102,804	(100,634)	$ (3,036)	(469)	8
Beginning balance, shares at Dec. 31, 2021		39,688			802
Net income (loss)	(122)			(123)		(123)	1
Accrued dividend in OmniMetrix preferred shares	(1)						(1)
Stock option compensation	31		31			31
Ending balance at Mar. 31, 2022	(553)	$ 397	102,835	(100,757)	$ (3,036)	(561)	8
Ending balance, shares at Mar. 31, 2022		39,688			802
Balances as of March 31, 2021 at Dec. 31, 2021	(461)	$ 397	102,804	(100,634)	$ (3,036)	(469)	8
Beginning balance, shares at Dec. 31, 2021		39,688			802
Net income (loss)	(345)
Ending balance at Jun. 30, 2022	(755)	$ 397	102,857	(100,980)	$ (3,036)	(762)	7
Ending balance, shares at Jun. 30, 2022		39,688			802
Balances as of March 31, 2021 at Mar. 31, 2022	(553)	$ 397	102,835	(100,757)	$ (3,036)	(561)	8
Beginning balance, shares at Mar. 31, 2022		39,688			802
Net income (loss)	(223)			(223)		(223)		[1]
Accrued dividend in OmniMetrix preferred shares	(1)						(1)
Stock option compensation	22		22			22
Ending balance at Jun. 30, 2022	$ (755)	$ 397	$ 102,857	$ (100,980)	$ (3,036)	$ (762)	$ 7
Ending balance, shares at Jun. 30, 2022		39,688			802

[1] Less than $1

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows (used in) provided by operating activities:
Net (loss) income	$ (345,000)	$ 26,000
Depreciation and amortization	48,000	37,000
Impairment of software	51,000
Non-cash lease expense	59,000	59,000
Stock-based compensation	53,000	36,000
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable	292,000	(98,000)
Increase in inventory	(298,000)	(127,000)
Increase in deferred cost of goods sold	(117,000)	(33,000)
Increase in other current assets and other assets	(1,000)	(18,000)
Decrease in accounts payable and accrued expenses	(125,000)	(95,000)
Increase in deferred revenue	242,000	165,000
Decrease in operating lease liability	(62,000)	(60,000)
Increase in other current liabilities and non-current liabilities	9,000	1,000
Net cash (used in) provided by operating activities	(194,000)	83,000
Cash flows used in investing activities:
Investments in technology	(266,000)	(42,000)
Other capital investments	(3,000)
Net cash used in investing activities	(269,000)	(42,000)
Cash flows used in financing activities:
Short-term credit, net		(149,000)
Net cash used in financing activities		(149,000)
Net decrease in cash	(463,000)	(108,000)
Cash at the beginning of the year	1,722,000	2,063,000
Cash at the end of the period	1,259,000	1,955,000
Cash paid during the year for:
Interest	1,000	4,000
Non-cash investing and financing activities:
Accrued preferred dividends to former Acorn director and/or former OmniMetrix CEO	$ 2,000	$ 2,000

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

NOTE 1— BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Acorn Energy, Inc. and its subsidiaries, OmniMetrix, LLC and OMX Holdings, Inc. (collectively, “Acorn” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six- and three-month periods ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. All dollar amounts are rounded to the nearest thousand and, thus, are approximate.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 31, 2022.

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ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

ACCOUNTING POLICIES

NOTE 2—ACCOUNTING POLICIES

Use of Estimates in Preparation of Financial Statements

The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the unaudited condensed unaudited consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods.

As applicable to these unaudited condensed consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to income taxes, inventories, account receivable allowances, contingencies, revenue recognition, management’s projections and analyses of the possible impairments.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $1,259,000 at June 30, 2022. The Company does not believe there is significant risk of non-performance by these counterparties. For the three- and six-month periods ended June 30, 2022, there were no customers that represented greater than 10% of the Company’s total invoiced sales or of our accounts receivable at June 30, 2022. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base.

Basic and Diluted Net (Loss) Income Per Share

Basic net (loss) income per share is computed by dividing the net (loss) income attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the year, excluding treasury stock. Diluted net (loss) income per share is computed by dividing the net (loss) income by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants. The dilutive effects of stock options and warrants are excluded from the computation of diluted net (loss) income per share if doing so would be antidilutive. For both the six- and three-month periods ending June 30, 2022, the number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 979,000 (which have a weighted average exercise price of $0.41) and the number of warrants that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 35,000 (which had a weighted average exercise price of $0.13). For the six- and three-month periods ending June 30, 2021, respectively, the number of options that were excluded from the computation of diluted net income per share, as they had an antidilutive effect, was 286,000 (which had a weighted average exercise price of $0.79) and 321,000 (which had a weighted average exercise price of $0.76); there were no antidilutive warrants.

The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):

	Six months ended June 30,					Three months ended June 30,
	2022			2021		2022			2021
Net (loss) income available to common stockholders	$	(346	)	$	22	$	(223	)	$	2
Weighted average share outstanding:
Basic		39,688			39,688		39,688			39,688
Add: Warrants		—			27		—			27
Add: Stock options		—			199		—			221
Diluted		39,688			39,914		39,688			39,936
Basic and diluted net (loss) income per share	$	(0.01	)	$	0.00	$	(0.01	)	$	0.00

Recently Issued Accounting Principles

Other than the pronouncement noted below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the six- and three-month periods ended June 30, 2022, that are of material significance, or have potential material significance, to the Company.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements and related disclosures.

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LIQUIDITY

6 Months Ended

Jun. 30, 2022

Liquidity

LIQUIDITY

NOTE 3—LIQUIDITY

At June 30, 2022, the Company had negative working capital of $455,000. The Company’s working capital includes $1,259,000 of cash and deferred revenue of $3,642,000. Such deferred revenue does not require significant cash outlay for the revenue to be recognized. Net cash decreased during the six months ended June 30, 2022 by $463,000, of which $194,000 was used in operating activities and $269,000 was used in investing activities

During the first six months of 2022, the Company’s OmniMetrix, LLC subsidiary provided $371,000 from operations while the Company’s corporate headquarters used $565,000 during the same period.

OmniMetrix is considered an essential business because it provides infrastructure support to both government and commercial sectors and across key industries. The Company has experienced minimal negative impacts due to the COVID-19 pandemic to date. Throughout the pandemic, the Company continued to realize new equipment sales (although not at the anticipated growth rate due to travel and meeting restrictions which have negatively impacted the sales closing timeline), has continued to collect its monthly recurring monitoring revenues and has retained its customer base. While the impacts of COVID-19 in the future are uncertain, the Company believes that due to the need for backup power and the desirability of remote monitoring services, it should continue to be positioned for stable financial performance. Business travel has now started to resume and sales are returning to projected levels.

As of August 9, 2022, the Company had cash of $1,143,000. The Company believes that such cash, plus the cash generated from operations, will provide sufficient liquidity to finance the operating activities of Acorn and OmniMetrix at their current level of operations for the foreseeable future and for the twelve months from the issuance of these unaudited condensed consolidated financial statements in particular. The Company may, at some point, elect to obtain a new line of credit or other source of financing to fund additional investments in the business.

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LEASES

6 Months Ended

Jun. 30, 2022

Leases

LEASES

NOTE 4—LEASES

OmniMetrix leases office space and office equipment under operating lease agreements. The office lease has an expiration date of September 30, 2025. The office equipment lease was entered into in April 2019 and has a sixty-month term. Operating lease payments for the six months ended June 30, 2022 and 2021 were $62,000 and $60,000, respectively. Operating lease payments for the three months ended June 30, 2022 and 2021 were $32,000 and $30,000, respectively. The future minimum lease payments on non-cancellable operating leases as of June 30, 2022 using a discount rate of 4.5% are $390,000. The 4.5% discount rate used is the incremental borrowing rate which, as defined in ASC 842, is the rate of interest that a lessee would have to pay to borrow, on a collateralized basis, over a similar term and in a similar economic environment, an amount equal to the lease payments.

Supplemental cash flow information related to leases consisted of the following (in thousands):

	June 30,
	2022		2021
Cash paid for operating lease liabilities	$	62	$	60

Supplemental balance sheet information related to leases consisted of the following:

	2022
Weighted average remaining lease terms for operating leases		3.23 years

The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of June 30, 2022 (in thousands):

	Twelve-month period ended June 30,
2023	$	126
2024		129
2025		131
2026		33
Total undiscounted cash flows		419
Less: Imputed interest		(29	)
Present value of operating lease liabilities (a)	$	390

(a) Includes current portion of $111,000 for operating leases.

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 office space of the Company’s 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia for a monthly sublease payment of $2,375 which includes the base rent plus a pro-rata share of utilities, property taxes and insurance. Fifty percent of any excess rent received above the per square foot amount that the Company pays will be remitted to the Company’s landlord less the allocation of any shared expenses and leasehold improvements specific to the sublease. The Company invested $7,000 on leasehold improvements related to the sublease. Due to the offset of the capital expenditures, the Company has not had any net rent due to its landlord to date related to the sublease. The estimated amount the Company expects to remit to the landlord subsequent to the first twelve months is $6,700 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.

	Twelve-month period ended June 30,
2023	$	26
2024		26
2025		26
2026		7
Total undiscounted cash flows	$	85

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 5—COMMITMENTS AND CONTINGENCIES

On August 19, 2019, OmniMetrix entered into an agreement with a software development partner to create and license to OmniMetrix a new software platform and application. Pursuant to this agreement, OmniMetrix paid this partner equal monthly payments over the first seven months of the term of the agreement equal to $200,000 in the aggregate. OmniMetrix will also pay the partner (i) a per-sensor monitoring fee for each sensor connected to the developed technology, or (ii) a percentage of any revenue received above a specified amount per sensor monitored per month in gas applications only. Commencing on January 1, 2021, OmniMetrix paid the partner a quarterly licensing fee of $12,500 which was renegotiated to $4,450 effective October 1, 2021. The annual licensing fee moving forward will be $17,800, which will be paid in quarterly increments of $4,450. The per-sensor monitoring fees have not yet commenced. The initial term of this agreement ends on August 19, 2022 and would have automatically renewed for one-year periods but OmniMetrix delivered a written notice of termination to the other party sixty days prior to the end of the respective term. OmniMetrix is currently working with the software development partner to negotiate more favorable terms.

In addition to the above, the Company has $419,000 in operating lease obligations payable through 2026 and $28,000 in other contractual obligations. The Company also has $920,000 in open purchase order commitments payable through 2022.

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EQUITY

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

EQUITY

NOTE 6—EQUITY

(a) General

At June 30, 2022 the Company had issued and outstanding 39,687,589 shares of its common stock, par value $0.01 per share. Holders of outstanding common stock are entitled to receive dividends when and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company.

The Company is not authorized to issue preferred stock. Accordingly, no preferred stock is issued or outstanding.

(b) Summary Employee Option Information

The Company’s stock option plans provide for the grant to officers, directors and employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money” at the end of the option term, it is automatically exercised “net”. In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee, but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable for one share of the Company’s common stock. Most options expire within five to ten years from the date of the grant, and generally vest over a three-year period from the date of the grant.

At June 30, 2022, 1,434,850 options were available for grant under the Amended and Restated 2006 Stock Incentive Plan and no options were available for grant under the 2006 Stock Option Plan for Non-Employee Directors. During the three months ended June 30, 2022, 50,000 options were issued to the Company’s CFO. During the six months ended June 30, 2022, 30,000 options were issued to directors, 35,000 options were issued to the Company’s CEO, 50,000 options were issued to the Company’s CFO and 30,770 options were issued to other employees. In the six and three months ended June 30, 2022, there were no grants to non-employees (other than the directors, CEO and CFO).

No options were exercised in the six and three months ended June 30, 2022. The intrinsic value of options outstanding and of options exercisable at June 30, 2022 was $126,000 and $114,000, respectively. The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages):

	Number of Options (in shares)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2021		833,020	$	0.39	4.7 years	$	291,000
Granted		145,770		0.55
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2022		978,790	$	0.41	4.6 years	$	126,000
Exercisable at June 30, 2022		737,579	$	0.38	4.1 years	$	114,000

The fair value of the options granted of $54,000 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

Risk-free interest rate	1.8	%
Expected term of options	3.9 years
Expected annual volatility	93.6	%
Expected dividend yield	—	%

(c) Stock-based Compensation Expense

Stock-based compensation expense included in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations was $53,000 and $36,000 for the six-month periods ended June 30, 2022 and 2021, respectively and $22,000 and $21,000 for the three-month periods ended June 30, 2022 and 2021, respectively.

The total compensation cost related to non-vested awards not yet recognized was $59,000 as of June 30, 2022.

(d) Warrants

The Company previously issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows:

	Number of Warrants (in shares)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life
Outstanding at December 31, 2021		35,000	$	0.13	14.5 months
Granted		—		—
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2022		35,000	$	0.13	8.5 months

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SEGMENT REPORTING

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 7— SEGMENT REPORTING

As of June 30, 2022, the Company operates in two reportable operating segments, both of which are performed through the Company’s OmniMetrix subsidiary:

● The PG (Power Generation) (“PG”) segment provides wireless remote monitoring and control systems and services for critical assets as well as Internet of Things applications. The PG segment includes OmniMetrix’s monitoring device for industrial air compressors and dryers, and a line of annunciators.

● The CP (Cathodic Protection) (“CP”) segment provides remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies.

The Company’s reportable segments are strategic business units, offering different products and services, and are managed separately as each business requires different technology and marketing strategies.

The following tables represent segmented data for the six-month and three-month periods ended June 30, 2022 and 2021 (in thousands):

	PG		CP			Total
Six months ended June 30, 2022:
Revenues from external customers	$	2,825	$	547		$	3,372
Segment gross profit		2,164		340			2,504
Depreciation and amortization		41		8			49
Segment income (loss) before income taxes*	$	262	$	(45	)	$	217
Six months ended June 30, 2021:
Revenues from external customers	$	2,837	$	479		$	3,316
Segment gross profit		2,150		282			2,432
Depreciation and amortization		32		5			37
Segment income (loss) before income taxes	$	510	$	(17	)	$	493
Three months ended June 30, 2022:
Revenues from external customers	$	1,380	$	241		$	1,621
Segment gross profit		1,091		155			1,246
Depreciation and amortization		24		5			29
Segment income (loss) before income taxes*	$	73	$	(24	)	$	49
Three months ended June 30, 2021:
Revenues from external customers	$	1,379	$	232		$	1,611
Segment gross profit		1,082		140			1,222
Depreciation and amortization		19		3			22
Segment income (loss) before income taxes	$	234	$	(4	)	$	230

* The software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Segment income (loss) before income taxes” for the six and three months ended June 30, 2022.

The Company does not currently break out total assets by reportable segment as there is a high level of shared utilization between the segments. Further, the Chief Decision Maker does not review the assets by segment.

Reconciliation of Segment (Loss) Income to Consolidated Net (Loss) Income Before Income Taxes

	Six months ended June 30,						Three months ended June 30,
	2022			2021			2022			2021
Total net income before income taxes for reportable segments*	$	217		$	493		$	49		$	230
Unallocated cost of corporate headquarters		(510	)		(467	)		(220	)		(226	)
Consolidated net (loss) income before income taxes	$	(293	)	$	26		$	(171	)	$	4

* The software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Total net income before income taxes for reportable segments” for the six and three months ended June 30, 2022.

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REVENUE

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE

NOTE 8—REVENUE

The following table disaggregates the Company’s revenue for the six-month and three-month periods ended June 30, 2022 and 2021 (in thousands):

	Hardware		Monitoring		Total
Six months ended June 30, 2022:
PG Segment	$	1,002	$	1,823	$	2,825
CP Segment		414		133		547
Total Revenue	$	1,416	$	1,956	$	3,372

	Hardware		Monitoring		Total
Six months ended June 30, 2021:
PG Segment	$	942	$	1,895	$	2,837
CP Segment		349		130		479
Total Revenue	$	1,291	$	2,025	$	3,316

	Hardware		Monitoring		Total
Three months ended June 30, 2022:
PG Segment	$	479	$	901	$	1,380
CP Segment		176		65		241
Total Revenue	$	655	$	966	$	1,621

	Hardware		Monitoring		Total
Three months ended June 30, 2021:
PG Segment	$	425	$	954	$	1,379
CP Segment		169		63		232
Total Revenue	$	594	$	1,017	$	1,611

Deferred revenue activity for the six months ended June 30, 2022 can be seen in the table below (in thousands):

	Hardware			Monitoring			Total
Balance at December 31, 2021	$	3,268		$	2,125		$	5,393
Additions during the period		1,282			1,943			3,225
Recognized as revenue		(1,027	)		(1,956	)		(2,983	)
Balance at June 30, 2022	$	3,523		$	2,112		$	5,635
Amounts to be recognized as revenue in the twelve-month-period ending:
June 30, 2023	$	1,839		$	1,803		$	3,642
June 30, 2024		1,270			304			1,574
June 30, 2025 and thereafter		414			5			419
	$	3,523		$	2,112		$	5,635

Other revenue of $389,000, is related to accessories, repairs, and other miscellaneous charges that are recognized to revenue when sold and are not deferred.

Deferred charges relate only to the sale of equipment. Deferred charges activity for the six months ended June 30, 2022 can be seen in the table below (in thousands):

Balance at December 31, 2021	$	1,513
Additions, net of adjustments, during the period		601
Recognized as cost of sales		(484	)
Balance at June 30, 2022	$	1,630
Amounts to be recognized as cost of sales in the twelve-month-period ending:
June 30, 2023	$	858
June 30, 2024		581	*
June 30, 2025 and thereafter		191	*
	$	1,630

Other cost of goods sold (COGS) recognized of $227,000 is related to accessories, repairs, and other miscellaneous charges that are recognized to revenue when sold and are not deferred, in addition to $157,000 in monitoring COGS which is not deferred.

The following table provides a reconciliation of the Company’s sales commissions contract assets for the six-month period ended June 30, 2022 (in thousands):

	Hardware			Monitoring			Total
Balance at December 31, 2021	$	242		$	53		$	295
Additions during the period		94			20			114
Amortization of sales commissions		(71	)		(13	)		(84	)
Balance at June 30, 2022	$	265		$	60		$	325

The capitalized sales commissions are included in other current assets ($159,000) and other assets ($166,000) in the Company’s unaudited condensed consolidated balance sheets as of June 30, 2022. The capitalized sales commissions are included in other current assets ($138,000) and other assets ($157,000) in the Company’s consolidated balance sheets as of December 31, 2021.

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RELATED PARTY BALANCES AND TRANSACTIONS

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

RELATED PARTY BALANCES AND TRANSACTIONS

NOTE 9—RELATED PARTY BALANCES AND TRANSACTIONS

Officer and Director Fees

The Company recorded fees to officers of $261,000 and $256,000 for the six months ended June 30, 2022 and 2021, respectively, and $131,000 and $129,000 for the three months ended June 30, 2022 and 2021, respectively, which is included in selling, general and administrative expenses.

The Company recorded fees to directors of $30,000 for the six months ended June 30, 2022 and 2021, and $15,000 for the three months ended June 30, 2022 and 2021, which is included in selling, general and administrative expenses.

Intercompany

The related party balance due to Acorn from OmniMetrix for amounts loaned, accrued interest and expenses paid by Acorn on OmniMetrix’s behalf was $3,661,000 as of June 30, 2022 as compared to $4,217,000 as of December 31, 2021. This balance is eliminated in consolidation. During the six months ended June 30, 2022, the intercompany amount due to Acorn from OmniMetrix decreased by $556,000. This included repayments of $780,000 offset by interest of $89,000, dividends of $38,000 due to Acorn and $97,000 in shared expenses paid by Acorn. During the six months ended June 30, 2021, the intercompany amount due to Acorn from OmniMetrix decreased by $157,000. This included repayments of $345,000 offset by interest of $104,000, dividends of $38,000 due to Acorn and $46,000 in shared expenses paid by Acorn.

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ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Use of Estimates in Preparation of Financial Statements

Use of Estimates in Preparation of Financial Statements

The preparation of unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the unaudited condensed unaudited consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods.

As applicable to these unaudited condensed consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to income taxes, inventories, account receivable allowances, contingencies, revenue recognition, management’s projections and analyses of the possible impairments.

Concentrations of Credit Risk

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $1,259,000 at June 30, 2022. The Company does not believe there is significant risk of non-performance by these counterparties. For the three- and six-month periods ended June 30, 2022, there were no customers that represented greater than 10% of the Company’s total invoiced sales or of our accounts receivable at June 30, 2022. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base.

Basic and Diluted Net (Loss) Income Per Share

Basic and Diluted Net (Loss) Income Per Share

Basic net (loss) income per share is computed by dividing the net (loss) income attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the year, excluding treasury stock. Diluted net (loss) income per share is computed by dividing the net (loss) income by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants. The dilutive effects of stock options and warrants are excluded from the computation of diluted net (loss) income per share if doing so would be antidilutive. For both the six- and three-month periods ending June 30, 2022, the number of options that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 979,000 (which have a weighted average exercise price of $0.41) and the number of warrants that were excluded from the computation of diluted net loss, as they had an antidilutive effect, was 35,000 (which had a weighted average exercise price of $0.13). For the six- and three-month periods ending June 30, 2021, respectively, the number of options that were excluded from the computation of diluted net income per share, as they had an antidilutive effect, was 286,000 (which had a weighted average exercise price of $0.79) and 321,000 (which had a weighted average exercise price of $0.76); there were no antidilutive warrants.

The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):

	Six months ended June 30,					Three months ended June 30,
	2022			2021		2022			2021
Net (loss) income available to common stockholders	$	(346	)	$	22	$	(223	)	$	2
Weighted average share outstanding:
Basic		39,688			39,688		39,688			39,688
Add: Warrants		—			27		—			27
Add: Stock options		—			199		—			221
Diluted		39,688			39,914		39,688			39,936
Basic and diluted net (loss) income per share	$	(0.01	)	$	0.00	$	(0.01	)	$	0.00

Recently Issued Accounting Principles

Recently Issued Accounting Principles

Other than the pronouncement noted below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the six- and three-month periods ended June 30, 2022, that are of material significance, or have potential material significance, to the Company.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on its condensed consolidated financial statements and related disclosures.

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ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES

The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):

	Six months ended June 30,					Three months ended June 30,
	2022			2021		2022			2021
Net (loss) income available to common stockholders	$	(346	)	$	22	$	(223	)	$	2
Weighted average share outstanding:
Basic		39,688			39,688		39,688			39,688
Add: Warrants		—			27		—			27
Add: Stock options		—			199		—			221
Diluted		39,688			39,914		39,688			39,936
Basic and diluted net (loss) income per share	$	(0.01	)	$	0.00	$	(0.01	)	$	0.00

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LEASES (Tables)

6 Months Ended

Jun. 30, 2022

Leases

SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES

Supplemental cash flow information related to leases consisted of the following (in thousands):

	June 30,
	2022		2021
Cash paid for operating lease liabilities	$	62	$	60

SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES

Supplemental balance sheet information related to leases consisted of the following:

	2022
Weighted average remaining lease terms for operating leases		3.23 years

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

The table below reconciles the undiscounted future minimum lease payments under non-cancelable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of June 30, 2022 (in thousands):

	Twelve-month period ended June 30,
2023	$	126
2024		129
2025		131
2026		33
Total undiscounted cash flows		419
Less: Imputed interest		(29	)
Present value of operating lease liabilities (a)	$	390

(a) Includes current portion of $111,000 for operating leases.

SCHEDULE OF SUBLEASE

	Twelve-month period ended June 30,
2023	$	26
2024		26
2025		26
2026		7
Total undiscounted cash flows	$	85

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EQUITY (Tables)

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

SUMMARY OF BLACK-SCHOLES OPTION PRICING TO ESTIMATE FAIR VALUE

	Number of Options (in shares)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at December 31, 2021		833,020	$	0.39	4.7 years	$	291,000
Granted		145,770		0.55
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2022		978,790	$	0.41	4.6 years	$	126,000
Exercisable at June 30, 2022		737,579	$	0.38	4.1 years	$	114,000

SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES PRICING MODEL

The fair value of the options granted of $54,000 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

Risk-free interest rate	1.8	%
Expected term of options	3.9 years
Expected annual volatility	93.6	%
Expected dividend yield	—	%

SUMMARY OF WARRANT ACTIVITY

The Company previously issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows:

	Number of Warrants (in shares)		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life
Outstanding at December 31, 2021		35,000	$	0.13	14.5 months
Granted		—		—
Exercised		—		—
Forfeited or expired		—		—
Outstanding at June 30, 2022		35,000	$	0.13	8.5 months

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SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

SUMMARY OF SEGMENTED DATA

The following tables represent segmented data for the six-month and three-month periods ended June 30, 2022 and 2021 (in thousands):

	PG		CP			Total
Six months ended June 30, 2022:
Revenues from external customers	$	2,825	$	547		$	3,372
Segment gross profit		2,164		340			2,504
Depreciation and amortization		41		8			49
Segment income (loss) before income taxes*	$	262	$	(45	)	$	217
Six months ended June 30, 2021:
Revenues from external customers	$	2,837	$	479		$	3,316
Segment gross profit		2,150		282			2,432
Depreciation and amortization		32		5			37
Segment income (loss) before income taxes	$	510	$	(17	)	$	493
Three months ended June 30, 2022:
Revenues from external customers	$	1,380	$	241		$	1,621
Segment gross profit		1,091		155			1,246
Depreciation and amortization		24		5			29
Segment income (loss) before income taxes*	$	73	$	(24	)	$	49
Three months ended June 30, 2021:
Revenues from external customers	$	1,379	$	232		$	1,611
Segment gross profit		1,082		140			1,222
Depreciation and amortization		19		3			22
Segment income (loss) before income taxes	$	234	$	(4	)	$	230

* The software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Segment income (loss) before income taxes” for the six and three months ended June 30, 2022.

SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED NET INCOME LOSS BEFORE INCOME TAXES

Reconciliation of Segment (Loss) Income to Consolidated Net (Loss) Income Before Income Taxes

	Six months ended June 30,						Three months ended June 30,
	2022			2021			2022			2021
Total net income before income taxes for reportable segments*	$	217		$	493		$	49		$	230
Unallocated cost of corporate headquarters		(510	)		(467	)		(220	)		(226	)
Consolidated net (loss) income before income taxes	$	(293	)	$	26		$	(171	)	$	4

* The software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Total net income before income taxes for reportable segments” for the six and three months ended June 30, 2022.

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REVENUE (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

SCHEDULE OF DISAGGREGATES OF REVENUE

The following table disaggregates the Company’s revenue for the six-month and three-month periods ended June 30, 2022 and 2021 (in thousands):

	Hardware		Monitoring		Total
Six months ended June 30, 2022:
PG Segment	$	1,002	$	1,823	$	2,825
CP Segment		414		133		547
Total Revenue	$	1,416	$	1,956	$	3,372

	Hardware		Monitoring		Total
Six months ended June 30, 2021:
PG Segment	$	942	$	1,895	$	2,837
CP Segment		349		130		479
Total Revenue	$	1,291	$	2,025	$	3,316

	Hardware		Monitoring		Total
Three months ended June 30, 2022:
PG Segment	$	479	$	901	$	1,380
CP Segment		176		65		241
Total Revenue	$	655	$	966	$	1,621

	Hardware		Monitoring		Total
Three months ended June 30, 2021:
PG Segment	$	425	$	954	$	1,379
CP Segment		169		63		232
Total Revenue	$	594	$	1,017	$	1,611

SCHEDULE OF DEFERRED REVENUE ACTIVITY

Deferred revenue activity for the six months ended June 30, 2022 can be seen in the table below (in thousands):

	Hardware			Monitoring			Total
Balance at December 31, 2021	$	3,268		$	2,125		$	5,393
Additions during the period		1,282			1,943			3,225
Recognized as revenue		(1,027	)		(1,956	)		(2,983	)
Balance at June 30, 2022	$	3,523		$	2,112		$	5,635
Amounts to be recognized as revenue in the twelve-month-period ending:
June 30, 2023	$	1,839		$	1,803		$	3,642
June 30, 2024		1,270			304			1,574
June 30, 2025 and thereafter		414			5			419
	$	3,523		$	2,112		$	5,635

SCHEDULE OF DEFERRED CHARGES ACTIVITY

Deferred charges relate only to the sale of equipment. Deferred charges activity for the six months ended June 30, 2022 can be seen in the table below (in thousands):

Balance at December 31, 2021	$	1,513
Additions, net of adjustments, during the period		601
Recognized as cost of sales		(484	)
Balance at June 30, 2022	$	1,630
Amounts to be recognized as cost of sales in the twelve-month-period ending:
June 30, 2023	$	858
June 30, 2024		581	*
June 30, 2025 and thereafter		191	*
	$	1,630

SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS

The following table provides a reconciliation of the Company’s sales commissions contract assets for the six-month period ended June 30, 2022 (in thousands):

	Hardware			Monitoring			Total
Balance at December 31, 2021	$	242		$	53		$	295
Additions during the period		94			20			114
Amortization of sales commissions		(71	)		(13	)		(84	)
Balance at June 30, 2022	$	265		$	60		$	325

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SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Accounting Policies [Abstract]
Net (loss) income available to common stockholders	$ (223)	$ 2	$ (346)	$ 22
Weighted average share outstanding:
Basic	39,688	39,688	39,688	39,688
Add: Warrants		27		27
Add: Stock options		221		199
Diluted	39,688	39,936	39,688	39,914
Basic and diluted net (loss) income per share	$ (0.01)	$ 0.00	$ (0.01)	$ 0.00

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ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Product Information [Line Items]
Cash and cash equivalents	$ 1,259,000		$ 1,259,000		$ 1,722,000
Stock Options [Member]
Product Information [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	979,000	321,000	979,000	286,000
Weighted average exercise price of options and warrants	$ 0.41		$ 0.41
Warrant [Member]
Product Information [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	35,000		35,000
Weighted average exercise price of options and warrants	$ 0.13	$ 0.76	$ 0.13	$ 0.79
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Minimum [Member]
Product Information [Line Items]
Concentration risk, percentage			10.00%

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LIQUIDITY (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Working capital	$ 455,000
Cash and cash equivalents, at carrying value	1,259,000		$ 1,722,000
Deferred revenue, current	3,642,000		$ 3,541,000
Cash, cash equivalents, restricted cash, and restricted cash equivalents, period increase (decrease), including exchange rate effect	463,000	$ 108,000
Net cash provided by (used in) investing activities	269,000	$ 42,000
Income loss from subsidiary operations	565,000
Cash	1,143,000
Subsidiaries [Member]
Subsidiary Operations	371,000
OmniMetrix, LLC [Member]
Income (loss) from continuing operations, net of tax, attributable to parent	$ 194,000

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SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Leases
Cash paid for operating lease liabilities	$ 62	$ 60

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SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES (Details)	Jun. 30, 2022
Leases
Weighted average remaining lease terms for operating leases	3 years 2 months 23 days

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SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details)	Jun. 30, 2022 USD ($)
Leases
2023	$ 126,000
2024	129,000
2025	131,000
2026	33,000
Total undiscounted cash flows	419,000
Less: Imputed interest	(29,000)
Present value of operating lease liabilities (a)	$ 390,000

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SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) (Parenthetical) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Leases
Current operating lease	$ 111,000	$ 107,000

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SCHEDULE OF SUBLEASE (Details) $ in Thousands	Jun. 30, 2022 USD ($)
Leases
2023	$ 26
2024	26
2025	26
2026	7
Total undiscounted cash flows	$ 85

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LEASES (Details Narrative)		1 Months Ended	3 Months Ended		6 Months Ended
	Jul. 06, 2021 USD ($) ft²	Apr. 30, 2019	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Lessee, operating lease, discount rate			4.50%		4.50%
Operating lease, liability			$ 390,000		$ 390,000
Sublease payments	$ 2,375
Leasehold Improvements, Gross	7,000
Estimated Sublease Payments	$ 6,700
King Industrial Reality Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Area of Land | ft²	1,900
King Industrial Realty Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Area of Land | ft²	21,000
Operating Lease Agreements [Member] | Omni Metrix Holdings, Inc. [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Lease expiration date		Sep. 30, 2025
Lessee, operating lease, description		The office equipment lease was entered into in April 2019 and has a sixty-month term
Operating lease, payments			$ 32,000	$ 30,000	$ 62,000	$ 60,000

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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)		6 Months Ended
	Aug. 19, 2019	Jun. 30, 2022
Master Services Agreement [Member]
Operating lease obligations payable		$ 419,000
Operating leases and contractual services		28,000
Commitment payable		$ 920,000
OmniMetrix, LLC [Member]
Monthly payments	$ 200,000
Quarterly licensing fee	12,500
Quarterly increments	4,450
Annual licensing fee	$ 17,800
Omnimetrix [Member]
Partner sensor transaction description	OmniMetrix will also pay the partner (i) a per-sensor monitoring fee for each sensor connected to the developed technology, or (ii) a percentage of any revenue received above a specified amount per sensor monitored per month in gas applications only. Commencing on January 1, 2021, OmniMetrix paid the partner a quarterly licensing fee of $12,500 which was renegotiated to $4,450 effective October 1, 2021. The annual licensing fee moving forward will be $17,800, which will be paid in quarterly increments of $4,450. The per-sensor monitoring fees have not yet commenced

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SUMMARY OF BLACK-SCHOLES OPTION PRICING TO ESTIMATE FAIR VALUE (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Equity [Abstract]
Number of Options (in shares), Outstanding at beginning of year	833,020
Weighted Average Exercise Price Per Share, Outstanding at beginning of year	$ 0.39
Weighted average remaining contractual life at end	4 years 7 months 6 days	4 years 8 months 12 days
Aggregate intrinsic value at beginning of year	$ 291,000
Number of Options (in shares), Granted at market price	145,770
Weighted Average Exercise Price Per Share, Granted	$ 0.55
Number of Options (in shares), Exercised
Weighted Average Exercise Price Per Share, Exercised
Number of Options (in shares), Forfeited or expired
Weighted Average Exercise Price Per Share, Forfeited or expired
Number of Options (in shares), Outstanding at end of year	978,790	833,020
Weighted Average Exercise Price Per Share, Outstanding at end of year	$ 0.41	$ 0.39
Aggregate intrinsic value at end of year	$ 126,000	$ 291,000
Number of Options (in shares), Exercisable at end of year	737,579
Weighted Average Exercise Price Per Share, Exercisable at end of year	$ 0.38
Weighted average remaining contractual life at exercisable at end of year	4 years 1 month 6 days
Aggregate intrinsic value at exercisable	$ 114,000

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SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES PRICING MODEL (Details)	6 Months Ended
	Jun. 30, 2022
Equity [Abstract]
Risk-free interest rate	1.80%
Expected term of options, in years	3 years 10 months 24 days
Expected annual volatility	93.60%
Expected dividend yield

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SUMMARY OF WARRANT ACTIVITY (Details) - Warrant [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of Warrants (in Shares), Outstanding at beginning balance	35,000
Weighted Average Exercise Price Per Share, Outstanding at beginning balance	$ 0.13
Weighted average remaining contractual life at end	8 months 15 days	14 months 15 days
Number of Warrants (in Shares), Granted
Weighted Average Exercise Price Per Share, Granted
Number of Warrants (in Shares), Exercised
Weighted Average Exercise Price Per Share, Exercised
Number of Warrants (in Shares), Forfeited or expired
Weighted Average Exercise Price Per Share, Forfeited or expired
Number of Warrants (in Shares), Outstanding at end balance	35,000	35,000
Weighted Average Exercise Price Per Share, Outstanding at end balance	$ 0.13	$ 0.13

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EQUITY (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Subsidiary, Sale of Stock [Line Items]
Common stock, shares outstanding	39,687,589		39,687,589
Common stock par value	$ 0.01		$ 0.01		$ 0.01
Number of options granted during period			145,770
Number of options exercised
Intrinsic value of options outstanding	$ 126,000		$ 126,000		$ 291,000
Intrinsic value of options exercisable	114,000		114,000
Compensation cost, non-vested awards not yet recognized	59,000		59,000
Selling, General and Administrative Expenses [Member]
Subsidiary, Sale of Stock [Line Items]
Stock based compensation expense	$ 22,000	$ 21,000	$ 53,000	$ 36,000
Non Employee Stock Option [Member]
Subsidiary, Sale of Stock [Line Items]
Number of options exercised	0		0
Chief Financial Officer [Member]
Subsidiary, Sale of Stock [Line Items]
Number of options granted during period	50,000		50,000
Director [Member]
Subsidiary, Sale of Stock [Line Items]
Number of options granted during period			30,000
Chief Executive Officer [Member]
Subsidiary, Sale of Stock [Line Items]
Number of options granted during period			35,000
Other Employees [Member]
Subsidiary, Sale of Stock [Line Items]
Number of options granted during period			30,770
Non-employee [Member]
Subsidiary, Sale of Stock [Line Items]
Number of options granted during period	0		0
Amended and Restated 2006 Stock Incentive Plan [Member]
Subsidiary, Sale of Stock [Line Items]
Number of options available for grant	1,434,850		1,434,850

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SUMMARY OF SEGMENTED DATA (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2022		Jun. 30, 2021	Jun. 30, 2022		Jun. 30, 2021
Segment Reporting Information [Line Items]
Revenues from external customers	$ 1,621		$ 1,611	$ 3,372		$ 3,316
Segment gross profit	1,246		1,222	2,504		2,432
Depreciation and amortization	29		22	49		37
Segment income (loss) before income taxes	49	[1]	230	217	[1]	493
PG [Member]
Segment Reporting Information [Line Items]
Revenues from external customers	1,380		1,379	2,825		2,837
Segment gross profit	1,091		1,082	2,164		2,150
Depreciation and amortization	24		19	41		32
Segment income (loss) before income taxes	73	[1]	234	262	[1]	510
CP [Member]
Segment Reporting Information [Line Items]
Revenues from external customers	241		232	547		479
Segment gross profit	155		140	340		282
Depreciation and amortization	5		3	8		5
Segment income (loss) before income taxes	$ (24)	[1]	$ (4)	$ (45)	[1]	$ (17)

[1] The software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Segment income (loss) before income taxes” for the six and three months ended June 30, 2022.

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SUMMARY OF SEGMENTED DATA (Details) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Segment Reporting [Abstract]
Segment income before income taxes	$ 51,000	$ 51,000

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SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED NET INCOME LOSS BEFORE INCOME TAXES (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Segment Reporting [Abstract]
Total net income before income taxes for reportable segments*	[1]	$ 49	$ 230	$ 217	$ 493
Unallocated cost of corporate headquarters		(220)	(226)	(510)	(467)
Consolidated net (loss) income before income taxes		$ (171)	$ 4	$ (293)	$ 26

[1] The software impairment of $51,000 is not related to a specific segment and, thus, is not included in the “Total net income before income taxes for reportable segments” for the six and three months ended June 30, 2022.

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SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED NET INCOME LOSS BEFORE INCOME TAXES (Details) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Segment Reporting [Abstract]
Segment income before income taxes	$ 51,000	$ 51,000

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SEGMENT REPORTING (Details Narrative)	6 Months Ended
	Jun. 30, 2022 Segments
Segment Reporting [Abstract]
Number of reportable segments	2

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SCHEDULE OF DISAGGREGATES OF REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Total Revenue	$ 1,621	$ 1,611	$ 3,372	$ 3,316
Hardware [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	655	594	1,416	1,291
Monitoring [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	966	1,017	1,956	2,025
PG [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	1,380	1,379	2,825	2,837
PG [Member] | Hardware [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	479	425	1,002	942
PG [Member] | Monitoring [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	901	954	1,823	1,895
CP [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	241	232	547	479
CP [Member] | Hardware [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	176	169	414	349
CP [Member] | Monitoring [Member]
Disaggregation of Revenue [Line Items]
Total Revenue	$ 65	$ 63	$ 133	$ 130

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SCHEDULE OF DEFERRED REVENUE ACTIVITY (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Disaggregation of Revenue [Line Items]
Balance at December 31, 2021	$ 5,393
Additions during the period	3,225
Recognized as revenue	(2,983)
Balance at June 30, 2022	5,635
June 30, 2023	3,642
June 30, 2024	1,574
June 30, 2025 and thereafter	419
Total	5,635
Hardware [Member]
Disaggregation of Revenue [Line Items]
Balance at December 31, 2021	3,268
Additions during the period	1,282
Recognized as revenue	(1,027)
Balance at June 30, 2022	3,523
June 30, 2023	1,839
June 30, 2024	1,270
June 30, 2025 and thereafter	414
Total	3,523
Monitoring [Member]
Disaggregation of Revenue [Line Items]
Balance at December 31, 2021	2,125
Additions during the period	1,943
Recognized as revenue	(1,956)
Balance at June 30, 2022	2,112
June 30, 2023	1,803
June 30, 2024	304
June 30, 2025 and thereafter	5
Total	$ 2,112

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SCHEDULE OF DEFERRED CHARGES ACTIVITY (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Revenue from Contract with Customer [Abstract]
Balance at December 31, 2021	$ 1,513
Additions, net of adjustments, during the period	601
Recognized as cost of sales	(484)
Balance at June 30, 2022	1,630
June 30, 2023	858
June 30, 2024	581
June 30, 2025 and thereafter	191
Total	$ 1,630

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SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Disaggregation of Revenue [Line Items]
Balance at December 31, 2021	$ 295
Additions during the period	114
Amortization of sales commissions	(84)
Balance at June 30, 2022	325
Hardware [Member]
Disaggregation of Revenue [Line Items]
Balance at December 31, 2021	242
Additions during the period	94
Amortization of sales commissions	(71)
Balance at June 30, 2022	265
Monitoring [Member]
Disaggregation of Revenue [Line Items]
Balance at December 31, 2021	53
Additions during the period	20
Amortization of sales commissions	(13)
Balance at June 30, 2022	$ 60

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REVENUE (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 1,621,000	$ 1,611,000	$ 3,372,000	$ 3,316,000
Cost of Goods and Services Sold	375,000	$ 389,000	868,000	$ 884,000
Other assets, current	221,000		221,000		$ 229,000
Capitalized Sales Commissions [Member]
Disaggregation of Revenue [Line Items]
Other assets, current	159,000		159,000		138,000
Other Assets	$ 166,000		166,000		$ 157,000
Other Revenue Related to Accessories, Repairs and Other Miscellaneous Charges [Member]
Disaggregation of Revenue [Line Items]
Revenue			389,000
Other COGS and Miscellaneous Charges [Member]
Disaggregation of Revenue [Line Items]
Cost of Goods and Services Sold			227,000
Monitoring Services [Member]
Disaggregation of Revenue [Line Items]
Cost of Goods and Services Sold			$ 157,000

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RELATED PARTY BALANCES AND TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
OmniMetrix, LLC [Member]
Related Party Transaction [Line Items]
Due from related party	$ 3,661,000		$ 3,661,000		$ 4,217,000
Increase decrease in related parties			556,000	$ 157,000
Repayment of related party debt			780,000	345,000
Interest			89,000	104,000
Dividends			38,000	38,000
Related party expenses paid			97,000	46,000
Officer [Member]
Related Party Transaction [Line Items]
Consulting and other fees to officer	131,000	$ 129,000	261,000	256,000
Director [Member]
Related Party Transaction [Line Items]
Consulting and other fees to directors	$ 15,000	$ 15,000	$ 30,000	$ 30,000