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 September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-33886

ACORN ENERGY, INC.

(Exact name of registrant as specified in its 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)

770-209-0012

(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
Common Stock, $0.01 par value per share		ACFN		The Nasdaq Stock Market LLC

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 November 4, 2025
Common Stock, $0.01 par value per share		2,504,626

ACORN ENERGY, INC.

Quarterly Report on Form 10-Q

for the Quarterly Period Ended September 30, 2025

TABLE OF CONTENTS

		PAGE
PART I Financial Information

Item 1. Financial Statements:		3

Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024		3

Condensed Consolidated Statements of Operations (unaudited) for the nine and three months ended September 30, 2025 and 2024		4

Condensed Consolidated Statements of Changes in Equity (Deficit) (unaudited) for the three and nine months ended September 30, 2025 and 2024		5

Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2025 and 2024		6

Notes to Condensed Consolidated Financial Statements (unaudited)		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19

Item 3. Quantitative and Qualitative Disclosures About Market Risk		26

Item 4. Controls and Procedures		26

PART II Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27

Item 5. Other Information		27

Item 6. Exhibits		28

Signatures		29

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.

PART I

ITEM 1.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	As of September 30, 2025			As of December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash	$	4,167		$	2,326
Accounts receivable, net		1,005			1,933
Inventory		1,170			436
Other current assets		238			288
State income tax receivable		—			10
Deferred cost of goods sold (COGS)		134			406
Total current assets		6,714			5,399
Property and equipment, net		422			505
Right-of-use assets		1,005			84
Deferred COGS		—			70
Other assets		113			103
Deferred tax assets		4,180			4,435
Total assets	$	12,434		$	10,596
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	348		$	297
Accrued expenses		229			290
Deferred revenue		3,158			3,521
Current operating lease liabilities		116			98
Other current liabilities		28			59
State income tax payable		46			19
Total current liabilities		3,925			4,284
Long-term liabilities:
Deferred revenue		319			712
Noncurrent operating lease liabilities		930			—
Other long-term liabilities		26			24
Total liabilities		5,200			5,020
Commitments and contingencies (Note 7)		-			-
Equity:
Acorn Energy, Inc. stockholders
Common stock - $0.01 par value per share: Authorized - 42,000,000 shares; issued - 2,555,717 at September 30, 2025 and 2,541,308 at December 31, 2024; outstanding - 2,504,626 at September 30, 2025 and 2,491,130 at December 31, 2024		25			25
Additional paid-in capital		103,618			103,405
Accumulated stockholders’ deficit		(93,418	)		(94,854	)
Treasury stock, at cost – 51,091 shares at September 30, 2025 and 50,178 at December 31, 2024		(3,052	)		(3,036	)
Total Acorn Energy, Inc. stockholders’ equity		7,173			5,540
Non-controlling interests		61			36
Total equity		7,234			5,576
Total liabilities and equity	$	12,434		$	10,596

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

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)

	2025			2024			2025			2024
	Nine months ended September 30,						Three months ended September 30,
	2025			2024			2025			2024

Revenue	$	9,101		$	7,457		$	2,478		$	3,050
COGS		2,191			2,014			533			863
Gross profit		6,910			5,443			1,945			2,187
Operating expenses:
Research and development (R&D) expenses		823			698			267			234
Selling, general and administrative (SG&A) expenses		4,377			3,653			1,519			1,197
Total operating expenses		5,200			4,351			1,786			1,431
Operating income		1,710			1,092			159			756
Interest income, net		85			53			34			20
Income before income taxes		1,795			1,145			193			776
Provision for (benefit from) income taxes		331			67			(65	)		42
Net income		1,464			1,078			258			734
Non-controlling interest share of income		(28	)		(17	)		(6	)		(9	)
Net income attributable to Acorn Energy, Inc. stockholders	$	1,436		$	1,061		$	252		$	725

Net income per share attributable to Acorn Energy, Inc stockholders – basic and diluted
Basic	$	0.58		$	0.43		$	0.10		$	0.29
Diluted	$	0.57		$	0.42		$	0.10		$	0.29
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic and diluted
Basic		2,494			2,487			2,509			2,487
Diluted		2,538			2,504			2,554			2,511

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

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

(UNAUDITED) (IN THOUSANDS)

	Number of Shares Outstanding		Common Stock		Additional Paid-In Capital		Accumulated Deficit			Number of Treasury Shares		Treasury Stock			Total Acorn Energy, Inc. Stockholders’ Equity			Non- controlling interests			Total Equity
	Three and Nine Months Ended September 30, 2025
	Number of Shares Outstanding		Common Stock		Additional Paid-In Capital		Accumulated Deficit			Number of Treasury Shares		Treasury Stock			Total Acorn Energy, Inc. Stockholders’ Equity			Non- controlling interests			Total Equity
Balances as of December 31, 2024		2,491	$	25	$	103,405	$	(94,854	)		50	$	(3,036	)	$	5,540		$	36		$	5,576
Net Income		—		—		—		464			—		—			464			10			474
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock-based compensation		—		—		61		—			—		—			61			—			61
Balances as of March 31, 2025		2,491	$	25	$	103,466	$	(94,390	)		50	$	(3,036	)	$	6,065		$	45		$	6,110
Net income		—		—		—		720			—		—			720			12			732
Proceeds from stock options		8		-*		48		—			—		—			48			—			48
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock-based compensation		—		—		32		—			—		—			32			—			32
Balances as of June 30, 2025		2,499	$	25	$	103,546	$	(93,670	)		50	$	(3,036	)	$	6,865		$	56		$	6,921
Net income		—		—		—		252			—		—			252			6			258
Proceeds from stock option exercise		6		—		39		—			—		—			39			—			39
Shares repurchased and held in Treasury		—		—		—		—			1		(16	)		(16	)		—			(16	)
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock-based compensation		—		—		33		—			—		—			33			—			33
Balances as of September 30, 2025		2,505	$	25	$	103,618	$	(93,418	)		51	$	(3,052	)	$	7,173		$	61		$	7,234

	Three and Nine Months Ended September 30, 2024
	Number of Shares Outstanding		Common Stock		Additional Paid-In Capital		Accumulated Deficit			Number of Treasury Shares		Treasury Stock			Total Acorn Energy, Inc. Stockholders’ Equity (Deficit)			Non- controlling interests			Total Equity (Deficit)
Balances as of December 31, 2023		2,484	$	25	$	103,321	$	(101,148	)		50	$	(3,036	)	$	(838	)	$	12		$	(826	)
Net income		—		—		—		65			—		—			65			3			68
Proceeds from warrant exercise		3		-*		13		—			—		—			13			—			13
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock-based compensation		—		—		27		—			—		—			27			—			27
Balances as of March 31, 2024		2,487	$	25	$	103,361	$	(101,083	)		50	$	(3,036	)	$	(733	)	$	14		$	(719	)
Net income		—		—		—		271			—		—			271			5			276
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock-based compensation		—		—		11		—			—		—			11			—			11
Balances as of June 30, 2024		2,487	$	25	$	103,372	$	(100,812	)		50	$	(3,036	)	$	(451	)	$	18		$	(433	)
Balances		2,487	$	25	$	103,372	$	(100,812	)		50	$	(3,036	)	$	(451	)	$	18		$	(433	)
Net income		—		—		—		725			—		—			725			9			734
Accrued dividend in OmniMetrix preferred shares		—		—		—		—			—		—			—			(1	)		(1	)
Stock-based compensation		—		—		14		—			—		—			14			—			14
Balances as of September 30, 2024		2,487	$	25	$	103,386	$	(100,087	)		50	$	(3,036	)	$	288		$	26		$	314
Balances		2,487	$	25	$	103,386	$	(100,087	)		50	$	(3,036	)	$	288		$	26		$	314

Less than $1.

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

ACORN ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED) (IN THOUSANDS)

	2025			2024
	Nine months ended September 30,
	2025			2024
Cash flows provided by operating activities:
Net income	$	1,464		$	1,078
Depreciation and amortization		85			91
Deferred tax expense		255			—
Decrease in the provision for credit loss		—			(7	)
Impairment of inventory		15			21
Non-cash lease expense		99			97
Stock-based compensation		126			52
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable		928			(351	)
(Increase) decrease in inventory		(749	)		282
Decrease in deferred COGS		341			644
Decrease in other current assets and other assets		40			37
Decrease in state income tax receivable		10			—
Decrease in deferred revenue		(756	)		(1,200	)
Decrease in operating lease liability		(72	)		(108	)
Increase in state income tax payable		27			—
(Decrease) increase in accounts payable, accrued expenses, other current liabilities and non-current liabilities		(18	)		103
Net cash provided by operating activities		1,795			739

Cash flows used in investing activities:
Investments in technology		(13	)		(44	)
Leasehold improvements		(4	)		—
Patents		(1	)		—
Purchases of furniture and equipment		(7	)		(4	)
Net cash used in investing activities		(25	)		(48	)

Cash flows provided by financing activities:
Stock repurchases held in Treasury		(16	)		—
Stock option exercise proceeds		87			13
Net cash provided by financing activities		71			13

Net increase in cash		1,841			704
Cash at the beginning of the period		2,326			1,449
Cash at the end of the period	$	4,167		$	2,153

Supplemental cash flow information:
Cash paid during the year for:
Interest	$	—		$	1
Income Taxes	$	39		$	2
Non-cash investing and financing activities:
Right-of-use assets	$	1,025			—
Operating lease liability		1,025			—
Accrued preferred dividends to former CEO of OmniMetrix	$	3		$	3

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

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. (“Acorn”) and its subsidiaries, OmniMetrix, LLC (“OmniMetrix”) and OMX Holdings, Inc. (collectively, with Acorn and OmniMetrix, “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. The December 31, 2024 consolidated balance sheet data were derived from audited financial statements but do not include all disclosures required by accounting principles generally accepted in the United States of America. 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 nine- and three-month periods ended September 30, 2025 and 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

All dollar amounts, except per share data, are rounded to the nearest thousand; thus, they 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, 2024, filed with the Securities and Exchange Commission on March 6, 2025.

NOTE 2—ACCOUNTING POLICIES

Use of Estimates in Preparation of Financial Statements

The preparation of 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods.

As applicable to these unaudited consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to valuation allowance.

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 $4,167,000 at September 30, 2025. The Company does not believe there is a significant risk of non-performance by its counterparties. For the nine- and three-month periods ended September 30, 2025, there was one customer that represented 32% and 7%, respectively, of the Company’s total invoiced revenue. At September 30, 2025, the Company had one customer that represented 34% of our total accounts receivable due at various dates but all no later than December 31, 2025 based on the customer’s payment terms. The customer with this concentration of both invoiced revenue and accounts receivable is the customer under a material contract that was executed in June 2024. Approximately 61% of the accounts receivable at December 31, 2024 was due from this customer which was subsequently collected in full. Credit risk with respect to the balance of trade receivables is typically diversified due to the number of entities comprising the Company’s customer base. Although we do not believe there is significant risk of non-performance by this counterparty, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition.

Inventory

Inventories are comprised of components (raw materials) and finished goods, which are measured at the lower of cost or net realizable value.

Raw materials inventory is generally comprised of radios, cables, antennas, and electrical components. Finished goods inventory consists of fully assembled systems ready for final shipment to the customer. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and applicable shipping costs.

All inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducts an assessment at the end of each reporting period of the Company’s inventory reserve and writes off any inventory items that are deemed obsolete.

Management conducted an assessment and wrote off inventory deemed obsolete valued at $15,000 and $11,000 in the nine- and three-month periods ended September 30, 2025, respectively. Management wrote off inventory valued at $21,000 and $3,000, respectively, during the nine- and three-month periods ended September 30, 2024.

Revenue Recognition

The Company’s revenue recognition policy is consistent with applicable revenue recognition guidance and interpretations. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes: (1) identifying contracts with customers, (2) identifying performance obligations within those contracts, (3) determining the transaction price, (4) allocating the transaction price to the performance obligation in the contract, which may include an estimate of variable consideration, and (5) recognizing revenue when or as each performance obligation is satisfied. The Company assesses whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring. The Company’s sales arrangements generally include standard payment terms. These terms effectively relate to all customers, products, and arrangements regardless of customer type, product mix or arrangement size. See Note 11, Revenue, for further discussion.

Revenue from sales of the hardware products that are distinct products are recorded when shipped (with the exception of the hardware products under a material contract with one customer for which revenue is recognized when the unit is accepted) while the revenue from sales of the hardware products (product versions sold prior to September 1, 2023) that were not separable from the Company’s monitoring services was deferred and amortized over the estimated unit life. Product revenues are recognized at the point in time when control of the product is transferred to the customer, which typically occurs upon shipment or delivery except to the one customer under a material contract for which this occurs upon acceptance. To determine when control has transferred, the Company considers if there is a present right to payment and if legal title, physical possession, and the significant risks and rewards of ownership of the asset has transferred to the customer. Revenue from the prepayment of monitoring fees (generally paid twelve months in advance) are recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period. This method provides a faithful depiction of the transfer of services as it aligns the recognition of revenue with the period in which the monitoring services are provided. By deferring the revenue and recognizing it over the service period, the financial statements accurately reflect the Company’s performance and obligations to its customers. See Notes 10 and 11 for the disaggregation of the Company’s revenue for the periods presented.

Any sales tax, value added tax, and other tax the Company collects concurrent with revenue producing activities are excluded from revenue.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and the tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for incomes taxes. During the year ended December 31, 2024, the Company recorded a reduction in the valuation allowance of $4,686,000 that was previously recorded against our deferred tax assets. During the nine and three months ended September 30, 2025, the Company recorded a reduction in the valuation allowance of $111,000 that was previously recorded against our deferred tax assets. As of December 31, 2024, and September 30, 2025, based on our projections, we believe that a partial valuation allowance of $11,400,000 and $10,963,000, respectively, is necessary against our deferred tax assets. Management will continue to assess the need for the valuation allowance and will make adjustments when appropriate. Management’s projections and beliefs are based upon a variety of estimates and numerous assumptions made by our management with respect to, among other things, interest rates, forecasted revenue of the hardware sales and monitoring revenue or revenue streams that could generate sufficient income so that the Company can utilize our net operating loss (NOL) carryforwards and other matters, many of which are difficult to predict, are subject to significant uncertainties and are beyond our control. As a result, there is inherently uncertainty that the estimates and assumptions upon which these projections and beliefs are based will prove to be accurate, that the anticipated results will be realized or that the actual results will not be substantially higher or lower than the Company projected. On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have assessed its impact on our financial statements and do not expect the provisions to have a material impact on our financial statements.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the company recognizes the largest amount of tax benefit that more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying unaudited condensed consolidated statements of operations. No accrued interest or penalties were required to be included in the related tax liability line in the unaudited condensed consolidated balance sheet as of September 30, 2025 and in the consolidated balance sheet as of December 31, 2024.

Basic and Diluted Net Income Per Share

Basic net income per share is computed by dividing the net income attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the period, excluding treasury stock. Diluted net income per share is computed by dividing the net 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 income per share if doing so would be antidilutive.

The combined weighted average number of options that were excluded from the computation of diluted net income per share, as they had an antidilutive effect, was 7,000 (which have a weighted average exercise price of $17.51) for the nine-month period ended September 30, 2025. There were no antidilutive options excluded from the computation of diluted net income per share in the three-month period ended September 30, 2025. For the nine-month period ending September 30, 2024, the weighted average number of options that were excluded from the computation of diluted net income, as they had an antidilutive effect, was 17,000 (which had a weighted average exercise price of $9.09). For the three-month period ending September 30, 2024, the weighted average number of options that were excluded from the computation of diluted net income, as they had an antidilutive effect, was 15,000 (which had a weighted average exercise price of $9.17).

The following data represents the amounts used in computing earnings per share and the effect on net income and the weighted average number of shares of dilutive potential common stock (in thousands, except per share data):

	2025		2024		2025		2024
	Nine months ended September 30,				Three months ended September 30,
	2025		2024		2025		2024
Net income attributable to common stockholders	$	1,436	$	1,061	$	252	$	725

Weighted average share outstanding:
-Basic		2,494		2,487		2,509		2,487
Add: Stock options		44		17		45		24
-Diluted		2,538		2,504		2,554		2,511

Basic net income per share	$	0.58	$	0.43	$	0.10	$	0.29
Diluted net income per share	$	0.57	$	0.42	$	0.10	$	0.29

Recent Accounting Pronouncements

In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-05, which introduces a practical expedient and an accounting policy election for estimating expected credit losses on current accounts receivable and contract assets arising from revenue transactions under ASC Topic 606. The practical expedient allows entities to assume that current conditions as of the reporting date remain unchanged over the remaining life of the asset, thereby eliminating the need to incorporate forecasts of future economic conditions. The accounting policy election, available to entities other than public business entities, permits consideration of post-balance sheet cash collections in estimating expected credit losses, provided the practical expedient is also elected.

Although the Company qualifies as a public business entity and is therefore not eligible for the accounting policy election, the Company has evaluated the practical expedient and determined that it does not expect a material impact on its consolidated financial statements upon adoption.

ASU 2025-05 is effective for interim and annual periods beginning after December 15, 2025, with early adoption permitted. The Company does not plan to early adopt and will implement the guidance beginning with its first quarter of fiscal 2026.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for us for our annual reporting for fiscal 2027 and for interim period reporting beginning in fiscal 2028 on a prospective basis. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual period ending December 31, 2025. The Company is currently evaluating the timing and impacts of adoption of this ASU.

NOTE 3—LIQUIDITY

As of September 30, 2025, the Company had $4,167,000 of consolidated cash.

At September 30, 2025, the Company had working capital of $2,789,000. Its working capital includes $4,167,000 of cash and deferred revenue of $3,158,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized. Total deferred revenue decreased by $756,000, from $4,233,000 at December 31, 2024 to $3,477,000 at September 30, 2025, as a result of the sales mix of products sold. Based on the current products being sold, the Company expects continued decreases in the deferred revenue balance in the foreseeable future (see Note 11, Revenue). The balance of deferred hardware revenue at September 30, 2025 will continue to be amortized over the months remaining in the three-year period since the hardware’s original date of shipment. Net cash increased during the nine-month period ended September 30, 2025 by $1,841,000, with $1,795,000 provided by operating activities, $25,000 used in investing activities, and $71,000 cash provided by financing activities.

As of November 4, 2025, the Company had cash of $4,372,000 . The Company believes that such cash, plus the cash expected to be generated from operations, will provide sufficient liquidity to finance the corporate activities of Acorn and operating activities of OmniMetrix at their current level of operations for at least the twelve-month period from the issuance of these unaudited condensed consolidated financial statements. 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. If the Company decides to pursue additional financing in the future, it may be in the form of a bank line, a new loan or investment by others, an equity raise by Acorn which could then facilitate a loan by Acorn to OmniMetrix, or any combination thereof. Whether alternative funds, such as third-party loans or investments, will be available at the time and on terms acceptable to Acorn and OmniMetrix cannot be determined at this time.

NOTE 4—ALLOWANCE FOR CREDIT LOSSES

For the Company, ASC 326, “Financial Instruments – Credit Losses (Topic 326)” applies to its contract assets (deferred COGS and deferred sales commissions), lease receivables (sublease, see Note 6) and trade receivables. There are no expected or estimated credit losses on the Company’s contract assets or its lease receivable based on the Company’s analysis of ASC 326.

The Company’s trade receivables primarily arise from the sale of our products to independent residential dealers, industrial distributors and dealers, national and regional retailers, equipment distributors, and certain end users with payment terms generally ranging from 30 to 90 days. The Company evaluates the credit risk of a customer when extending credit based on a combination of various financial and qualitative factors that may affect the customer’s ability to pay. These factors include the customer’s financial condition and past payment experience.

The Company maintains an allowance for credit losses, which represents an estimate of expected losses over the remaining contractual life of its receivables, considering current market conditions and estimates for supportable forecasts when appropriate. The Company measures expected credit losses on its trade receivables on an entity-by-entity basis. The estimate of expected credit losses considers a historical loss experience rate that is adjusted for delinquency trends, collection experience, and/or economic risk where appropriate. Additionally, management develops a specific allowance for trade receivables known to have a high risk of expected future credit loss.

The Company has historically experienced immaterial write-offs given the nature of the customers that receive credit. As of September 30, 2025, the Company had gross receivables of $1,007,000 and an allowance for credit losses of $2,000.

SCHEDULE OF ACCOUNTS RECEIVABLE

	September 30, 2025		December 31, 2024
	As of
	September 30, 2025		December 31, 2024
	(in thousands)
Accounts Receivable, net, beginning of period	$	1,933	$	536
Accounts Receivable, net, end of period	$	1,005	$	1,933

The following is a tabular reconciliation of the Company’s allowance for credit losses:

	September 30, 2025			December 31, 2024
	As of
	September 30, 2025			December 31, 2024
	(in thousands)
Balance at beginning of period	$	4		$	10
Decrease in provision for credit losses		—			(6	)
Net charge-offs		(2	)		—
Balance at end of period	$	2		$	4

NOTE 5—INVENTORY

SCHEDULE OF INVENTORY

As of

September 30,

SEC Form 10-Q filed by Acorn Energy Inc.