What changed in this filing

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Item 1A. Risk Factors

2022-03-31 compared with 2021-03-16 · 320 added, 346 removed, 107 unchanged (86% of the section changed)

may from time to time make written or oral statements that contain forward-looking information.

However, our actual results may

differ materially from our expectations, statements or projections.

The following risks and uncertainties, together with other

factors not presently determinable, could cause actual results to differ from our expectations, statements or projections.

However, our actual results may differ

materially from our expectations, statements or projections.

The following risks and uncertainties, together with other factors not presently

determinable, could cause actual results to differ from our expectations, statements or projections.

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

we had a history of losses from our OmniMetrix subsidiary and corporate overhead and have used significant amounts of cash to

fund our operating activities over the years, we have had several consecutive quarters of profitability at our OmniMetrix subsidiary

and also were able to cover corporate overhead in the fourth quarter of 2020 resulting in consolidated net income For the full

year 2020 and 2019, we had operating losses of approximately $310,000 and $699,000, respectively.

Cash provided by operating activities

was approximately $464,000 in 2020 and cash used in operating activities was approximately $1.2 million in 2019.

March 11, 2021, we had approximately $1.8 million of consolidated cash and cash equivalents.

2019, we provided OmniMetrix $323,000 for the repayment of a loan to a former director, and approximately $234,000 was added to

the intercompany amounts owed to Acorn for accrued interest and dividends, net of repayments of approximately $52,000.

Our corporate

overhead has also been significantly reduced and has stabilized.

Based on the above, we believe we have sufficient cash to finance

our operations for at least twelve months from the issuance of the consolidated financial statements contained in this Annual

However, we may need to seek additional sources of funding for long-term corporate costs or if OmniMetrix were not to

grow at the rate anticipated and needed additional funds for their operations.

Additional sources of funding may include additional

loans from related and/or non-related parties, partial sale of, or finding a strategic partner for, OmniMetrix or equity financings.

There can be no assurance additional funding will be available at acceptable terms or that we will be able to successfully utilize

any of these possible sources to provide additional liquidity.

we have had several consecutive quarters of profitability at our OmniMetrix subsidiary and also were able to cover corporate overhead

in the fourth quarter of 2021, we have had a history of losses from our OmniMetrix subsidiary and corporate overhead and have used significant

amounts of cash to fund our operating activities over the years.

we believe we have sufficient cash to finance our operations for at least twelve months from the issuance of the consolidated financial

statements contained in this Annual Report, we may need to seek additional sources of funding for long-term corporate costs or if OmniMetrix

were not to grow at the rate anticipated and needed additional funds for their operations.

Additional sources of funding may include

additional loans from related and/or non-related parties, partial sale of, or finding a strategic partner for, OmniMetrix or equity financings.

There can be no assurance additional funding will be available at acceptable terms or that we will be able to successfully utilize any

of these possible sources to provide additional liquidity.

depend on key management for the success of our business.

success is largely dependent on the skills, experience and efforts of our senior management team, including Jan Loeb and Tracy

The loss of the services of any of these key managers could materially harm our business, financial condition, future

results and cash flow.

We do not maintain “key person”

life insurance policies on any members of senior management.

We may also not be able to locate or employ on acceptable terms qualified replacements for our senior management if their services

were no longer available.

success is largely dependent on the skills, experience and efforts of our senior management team, including Jan Loeb, who beneficially

owns approximately 20.1% of the Company’s stock, and Tracy Clifford.

The loss of the services of any of these key managers could

materially harm our business, financial condition, future results and cash flow.

We do not maintain “key person” life insurance

policies on any members of senior management.

We may also not be able to locate or employ on acceptable terms qualified replacements

for our senior management if their services were no longer available.

of the services of a few key employees could harm our operations.

depend on key technical employees and sales personnel.

The loss of certain personnel could diminish our ability to develop and

maintain relationships with customers and potential customers.

The loss of certain technical personnel could harm our ability

to meet development and implementation schedules.

The loss of key sales personnel could have a negative effect on sales to certain

current customers.

Although most of our significant employees are bound by confidentiality and non-competition agreements, the

enforceability of such agreements cannot be assured.

Our future success also depends on our continuing ability to identify, hire,

train and retain other highly qualified technical and managerial personnel.

If we fail to attract or retain highly qualified technical

and managerial personnel in the future, our business could be disrupted.

The loss of certain personnel could diminish our ability to develop and maintain

relationships with customers and potential customers.

The loss of certain technical personnel could harm our ability to meet development

and implementation schedules.

The loss of key sales personnel could have a negative effect on sales to certain current customers.

most of our significant employees are bound by confidentiality and non-competition agreements, the enforceability of such agreements

cannot be assured.

Our future success also depends on our continuing ability to identify, hire, train and retain other highly qualified

technical and managerial personnel.

If we fail to attract or retain highly qualified technical and managerial personnel in the future,

our business could be disrupted.

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

common stock is traded on the OTCQB marketplace under the symbol “ACFN.”

The OTCQB is a regulated quotation service

that displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities and provides significantly

less liquidity than a listing on the NASDAQ Stock Markets or other national securities exchanges.

The OTCQB securities are traded

by a community of market makers that enter quotes and trade reports.

This market is limited in comparison to the national stock

exchanges, and any prices quoted may not be a reliable indication of the value of our common stock.

Quotes for stocks included

on the OTCQB are not listed in the financial sections of newspapers as are those for the NASDAQ Stock Market or the NYSE.

prices for securities traded solely on the OTCQB may be difficult to obtain.

on the OTCQB marketplace as opposed to a national securities exchange has resulted, and may continue to result, in a reduction

in some or all of the following, each of which could have a material adverse effect on the price of our common stock and our company:

common stock is traded on the OTCQB marketplace under the symbol “ACFN.” The OTCQB is a regulated quotation service that

displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities and provides significantly less

liquidity than a listing on the NASDAQ Stock Market or other national securities exchanges.

The OTCQB securities are traded by a community

of market makers that enter quotes and trade reports.

This market is limited in comparison to the national stock exchanges, and any prices

quoted may not be a reliable indication of the value of our common stock.

Quotes for stocks included on the OTCQB are not listed in the

financial sections of newspapers as are those for the NASDAQ Stock Market or the NYSE.

Therefore, prices for securities traded solely

on the OTCQB may be difficult to obtain.

on the OTCQB marketplace as opposed to a national securities exchange has resulted, and may continue to result, in a reduction in some

or all of the following, each of which could have a material adverse effect on the price of our common stock and our company:

liquidity of our common stock;

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stock rules will limit the ability of our stockholders to sell their stock.

SEC has adopted regulations which generally define “penny stock”

to be any equity security that has a market price

(as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.

Our securities

are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons

other than established customers and “accredited investors”.

The term “accredited investor”

refers generally

to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding

$200,000 or $300,000 jointly with their spouse.

The penny stock rules require a broker-dealer, prior to a transaction in a penny

stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which

provides information about penny stocks and the nature and level of risks in the penny stock market.

The broker-dealer also must

provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its

salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s

The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer

orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s

confirmation.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from

these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the

purchaser and receive the purchaser’s written agreement to the transaction.

These disclosure requirements may have the effect

of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules.

Consequently,

these penny stock rules may affect the ability of broker-dealers to trade our securities.

We believe that the penny stock rules

discourage investor interest in and limit the marketability of our common stock;

however, we have the option to execute a reverse

split which could mitigate this issue.

with changing regulation of corporate governance, public disclosure and financial accounting standards may result in additional

expenses and affect our reported results of operations.

informed of, and in compliance with, changing laws, regulations and standards relating to corporate governance, public disclosure

and accounting standards, including the Sarbanes-Oxley Act, Dodd-Frank Act, as well as new and proposed SEC regulations and accounting

standards, has required an increased amount of management attention and external resources.

Compliance with such requirements

may result in increased general and administrative expenses and an increased allocation of management time and attention to compliance

may not be able to successfully integrate companies which we may invest in or acquire in the future, which could materially and

adversely affect our business, financial condition, future results and cash flow.

SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined)

less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions.

Our securities are covered

by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established

customers and “accredited investors”.

The term “accredited investor” refers generally to institutions with assets

in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly

with their spouse.

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the

rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks

and the nature and level of risks in the penny stock market.

The broker-dealer also must provide the customer with current bid and offer

quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements

showing the market value of each penny stock held in the customer’s account.

The bid and offer quotations, and the broker-dealer

and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must

be given to the customer in writing before or with the customer’s confirmation.

In addition, the penny stock rules require that

prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination

that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that

is subject to these penny stock rules.

Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities.

We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock;

however, we have

the option to execute a reverse split which could mitigate this issue.

with changing regulation of corporate governance, public disclosure and financial accounting standards may result in additional expenses

and affect our reported results of operations.

informed of, and in compliance with, changing laws, regulations and standards relating to corporate governance, public disclosure and

accounting standards, including the Sarbanes-Oxley Act, Dodd-Frank Act, as well as new and proposed SEC regulations and accounting standards,

has required an increased amount of management attention and external resources.

Compliance with such requirements may result in increased

general and administrative expenses and an increased allocation of management time and attention to compliance activities.

may not be able to successfully integrate companies which we may invest in or acquire in the future, which could materially and adversely

affect our business, financial condition, future results and cash flow.

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

failure to effectively integrate any future acquisition’s management into our controls, systems and procedures could materially

adversely affect our business, results of operations, financial condition and cash flow.

to effectively integrate any future acquisition’s management into our controls, systems and procedures could materially adversely

affect our business, results of operations, financial condition and cash flow.

significant acquisition could require substantial use of our capital and may require significant debt or equity financing.

anticipate the need to closely manage our cash for the foreseeable future and cannot provide any assurance as to the availability

or terms of any such financing or its effect on our liquidity and capital resources.

acquisitions is often costly, and we may not be able to successfully integrate acquired companies with existing operations without

substantial costs, delays or other adverse operational or financial consequences.

Integrating acquired companies involves a number

of risks that could materially and adversely affect our business, including:

We anticipate

the need to closely manage our cash for the foreseeable future and cannot provide any assurance as to the availability or terms of any

such financing or its effect on our liquidity and capital resources.

acquisitions is often costly, and we may not be able to successfully integrate acquired companies with existing operations without substantial

costs, delays or other adverse operational or financial consequences.

Integrating acquired companies involves a number of risks that

could materially and adversely affect our business, including:

of the acquired companies to achieve the results we expect;

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a public company, we incur significant legal, accounting, and other expenses in connection with our reporting requirements.

Sarbanes-Oxley Act of 2002, Dodd-Frank Act and the rules subsequently implemented by the Securities and Exchange Commission (“SEC”)

have required changes in corporate governance practices of public companies.

These rules and regulations have already increased

our legal and financial compliance costs and the amount of time and effort we devote to compliance activities.

We expect that

as a result of continued compliance with these rules and regulations, we will continue to incur significant legal and financial

compliance costs.

We continue to regularly monitor and evaluate developments with respect to these new rules with our legal counsel,

but we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

The Sarbanes-Oxley

Act of 2002, Dodd-Frank Act and the rules subsequently implemented by the Securities and Exchange Commission (“SEC”) have

required changes in corporate governance practices of public companies.

These rules and regulations have already increased our legal

and financial compliance costs and the amount of time and effort we devote to compliance activities.

We expect that as a result of continued

compliance with these rules and regulations, we will continue to incur significant legal and financial compliance costs.

to regularly monitor and evaluate developments with respect to these new rules with our legal counsel, but we cannot predict or estimate

the amount of additional costs we may incur or the timing of such costs.

may in the future become involved in litigation that may materially adversely affect us.

time to time in the ordinary course of our business, we may become involved in various legal proceedings, including commercial,

product liability, employment, class action and other litigation and claims, as well as governmental and other regulatory investigations

and proceedings.

Any legal proceedings can be time-consuming, divert management’s attention and resources and cause us to

incur significant expenses.

Because litigation is inherently unpredictable, the results of any such actions may have a material

adverse effect on our business, operations or financial condition.

have reported material weaknesses in internal controls over financial reporting as of December 31, 2020 and we cannot assure you

that additional material weaknesses will not be identified in the future or that we can effectively remediate our reported weaknesses.

If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors

in our consolidated financial statements that could require a restatement, or our filings may not be timely, and investors may

lose confidence in our reported financial information.

404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting

as of the end of each year, and to include a management report assessing the effectiveness of our internal control over financial

reporting in each Annual Report on Form 10-K.

management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal control over

financial reporting will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide

only reasonable, not absolute, assurance that the control system’s objectives will be met.

Further, the design of a control

system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to

Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management

override of the controls.

Over time, controls may become inadequate because changes in conditions or deterioration in the degree

of compliance with policies or procedures may occur.

Because of the inherent limitations in a cost-effective control system, misstatements

due to error or fraud may occur and not be detected.

time to time in the ordinary course of our business, we may become involved in various legal proceedings, including commercial, product

liability, employment, class action and other litigation and claims, as well as governmental and other regulatory investigations and

Any legal proceedings can be time-consuming, divert management’s attention and resources and cause us to incur significant

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

operations or financial condition.

have reported material weaknesses in internal controls over financial reporting as of December 31, 2021 and we cannot assure you that

additional material weaknesses will not be identified in the future or that we can effectively remediate our reported weaknesses.

our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our consolidated

financial statements that could require a restatement, or our filings may not be timely, and investors may lose confidence in our reported

financial information.

404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting as of

the end of each year, and to include a management report assessing the effectiveness of our internal control over financial reporting

in each Annual Report on Form 10-K.

management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal control over financial

reporting will prevent all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable,

not absolute, assurance that the control system’s objectives will be met.

Further, the design of a control system must reflect

the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Controls can be

circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

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

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and

not be detected.

a result, we cannot assure you that additional significant deficiencies or material weaknesses in our internal control over financial

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or implement required new or improved controls, or any difficulties we encounter in their implementation, could result in significant

deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations, or result in material

misstatements in our financial statements.

Any such failure could also adversely affect the results of periodic management evaluations

regarding disclosure controls and the effectiveness of our internal control over financial reporting required under Section 404

of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.

The existence of a material weakness could result in errors

in our consolidated financial statements that could result in a restatement of consolidated financial statements, cause us to

fail to timely meet our reporting obligations and cause investors to lose confidence in our reported financial information.

we are unable to protect our intellectual property, or our intellectual property protection efforts are unsuccessful, others may

duplicate our technology.

deficiencies or material weaknesses, cause us to fail to timely meet our periodic reporting obligations, or result in material misstatements

in our financial statements.

Any such failure could also adversely affect the results of periodic management evaluations regarding disclosure

controls and the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act

of 2002 and the rules promulgated thereunder.

The existence of a material weakness could result in errors in our consolidated financial

statements that could result in a restatement of consolidated financial statements, cause us to fail to timely meet our reporting obligations

and cause investors to lose confidence in our reported financial information.

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

our technology.

rely on a combination of patents, trademarks, copyrights, trade secret laws and restrictions on disclosure to protect our intellectual

property rights.

Our ability to compete effectively will depend, in part, on our ability to protect our proprietary technology,

systems designs and manufacturing processes.

The ability of others to use our intellectual property could allow them to duplicate

the benefits of our products and reduce our competitive advantage.

In the future, should we apply for new patents, we do not know

whether any of our pending patent applications will be issued or, in the case of patents issued, that the claims allowed are or

will be sufficiently broad to protect our technology or processes.

Further, a patent issued covering one use of our technology

may not be broad enough to cover uses of that technology in other business areas.

Even if all our patent applications are issued

and are sufficiently broad, they may be challenged or invalidated, or our competitors may independently develop or patent technologies

or processes that are equivalent or superior to ours.

We could incur substantial costs in prosecuting patent and other intellectual

property infringement suits and defending the validity of our patents and other intellectual property.

While we have attempted

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

These actions could place our patents, trademarks and other intellectual property rights at risk and could result in the loss

of patent, trademark or other intellectual property rights protection for the products, systems and services on which our business

strategy partly depends.

Furthermore, it is not practical from a cost/benefit perspective to file for patent or trademark protection

in every jurisdiction where we now or in the future may conduct business.

In those territories where we do not have the benefit

of patent or trademark protections, our competitors may be able to prevent us from selling our products or otherwise limit our

ability to advertise under our established product names and we may face risks associated with infringement litigation as discussed

Our ability to compete effectively will depend, in part, on our ability to protect our proprietary technology, systems

designs and manufacturing processes.

The ability of others to use our intellectual property could allow them to duplicate the benefits

of our products and reduce our competitive advantage.

In the future, should we apply for new patents, we do not know whether any of our

pending patent applications will be issued or, in the case of patents issued, that the claims allowed are or will be sufficiently broad

to protect our technology or processes.

Further, a patent issued covering one use of our technology may not be broad enough to cover

uses of that technology in other business areas.

Even if all our patent applications are issued and are sufficiently broad, they may

be challenged or invalidated, or our competitors may independently develop or patent technologies or processes that are equivalent or

superior to ours.

We could incur substantial costs in prosecuting patent and other intellectual property infringement suits and defending

the validity of our patents and other intellectual property.

While we have attempted to safeguard and maintain our property rights, we

do not know whether we have been or will be completely successful in doing so.

These actions could place our patents, trademarks and

other intellectual property rights at risk and could result in the loss of patent, trademark or other intellectual property rights protection

for the products, systems and services on which our business strategy partly depends.

Furthermore, it is not practical from a cost/benefit

perspective to file for patent or trademark protection in every jurisdiction where we now or in the future may conduct business.

territories where we do not have the benefit of patent or trademark protections, our competitors may be able to prevent us from selling

our products or otherwise limit our ability to advertise under our established product names and we may face risks associated with infringement

litigation as discussed below.

rely, to a significant degree, on contractual provisions to protect our trade secrets and proprietary knowledge.

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may be breached, and we may not have adequate remedies for any breach.

Our trade secrets may also be known without breach of such

agreements or may be independently developed by competitors.

Our trade secrets may also be known without breach of such agreements

or may be independently developed by competitors.

can be difficult or expensive to obtain the insurance we need for our business operations.

part of our business operations, we maintain insurance as a corporate risk management strategy.

Insurance products are impacted

by market fluctuations and can become expensive and sometimes very difficult to obtain.

There can be no assurance that we can

secure all necessary or appropriate insurance at an affordable price for the required limits.

Our failure to obtain such insurance

could lead to uninsured losses that could have a material adverse effect on our results of operations or financial condition or

cause us to be out of compliance with our contractual obligations.

Insurance products are impacted by market

fluctuations and can become expensive and sometimes very difficult to obtain.

There can be no assurance that we can secure all necessary

or appropriate insurance at an affordable price for the required limits.

Our failure to obtain such insurance could lead to uninsured

losses that could have a material adverse effect on our results of operations or financial condition or cause us to be out of compliance

with our contractual obligations.

may in the future be involved in product liability and product warranty claims relating to the products we manufacture and distribute

that, if adversely determined, could adversely affect our financial condition, results of operations, and cash flows.

liability claims can be expensive to defend and can divert the attention of management and other personnel for significant periods,

regardless of the ultimate outcome.

Claims of this nature could also have a negative impact on customer confidence in our products

and our company.

While insurance can mitigate some of this risk, due to our current size and limited operating history, we have

been unable to obtain product liability insurance with significant coverage.

Our customers may not accept the terms we have been

able to procure and seek to terminate our existing contracts or cease to do business with us.

Product liability

claims can be expensive to defend and can divert the attention of management and other personnel for significant periods, regardless

of the ultimate outcome.

Claims of this nature could also have a negative impact on customer confidence in our products and our company.

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

liability insurance with significant coverage.

Our customers may not accept the terms we have been able to procure and seek to terminate

our existing contracts or cease to do business with us.

financial instruments could subject us to concentrations of credit risk.

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Our cash was deposited with a U.S.

bank and amounted to approximately $2.1 million at December 31, 2020.

Approximately

32% of the accounts receivable at December 31, 2020 was due from two customers, 20% from one and 12% from another, who pay their

receivables over usual credit periods.

Credit risk with respect to the balance of trade receivables is generally diversified due

to the number of entities comprising our customer base.

Although we do not believe there is significant risk of non-performance

by these counterparties, any failures or defaults on their part could negatively impact the value of our financial instruments

and could have a material adverse effect on our business, operations or financial condition.

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.

outbreak of the COVID-19 Coronavirus pandemic has caused governments around the world to implement quarantines of certain geographic

areas and implement significant restrictions on travel.

Several governments have 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.

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.

bank and amounted to approximately $1,722,000 at December 31, 2021.

We did not have any

customers that represented 10% or greater of the accounts receivable at December 31, 2021.

Credit risk with respect to the balance of

trade receivables is generally diversified due to the number of entities comprising our customer base.

Although we do not believe there

is significant risk of non-performance by these counterparties, any failures or defaults on their part could negatively impact the value

of our financial instruments and could have a material adverse effect on our business, operations or financial condition.

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

outbreak of the COVID-19 pandemic has caused governments around the world to implement quarantines of certain geographic areas and implement

significant restrictions on travel.

Several governments have 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

federal, state or local governments will further extend any of the current restrictions or if further restrictions will be put

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.

mandates may require forced shutdowns of our facilities for extended or indefinite periods.

1 unchanged sentence

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;

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.

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.

to date, has been deemed an essential business;

however, if this were to change and our operations are curtailed, we may need

to seek alternate sources of supply for services and staff, which may be more expensive.

Alternate sources may not be available

or may result in delays in shipments to us from our supply chain and subsequently to our customers, each of which would affect

our results of operations.

Further, if our customers’

businesses are similarly affected, they might delay or reduce purchases

from us, which could adversely affect our results of operations.

however, if this were to change and our operations are curtailed, we may need to seek

alternate sources of supply for services and staff, which may be more expensive.

Alternate sources may not be available or may result

in delays in shipments to us from our supply chain and subsequently to our customers, each of which would affect our results of operations.

Further, if our customers’ businesses are similarly affected, they might delay or reduce purchases from us, which could adversely

affect our results of operations.

RELATED TO OMNIMETRIX

OmniMetrix has reported quarterly net income since the second quarter of 2020, OmniMetrix has had a history of incurring net losses

since it was acquired by us and may never achieve sustained profitability.

OmniMetrix realized an operating profit of approximately $0.6 million in 2020 and $0.2 million in 2019, OmniMetrix has a history

of incurring operating losses since OmniMetrix was acquired by Acorn in 2012.

While OmniMetrix has significantly reduced its losses

and its cash needs from us and we expect positive cash flow from its operations in 2021, we can provide no assurance that OmniMetrix

will be able to generate sufficient revenues and cash flow to allow it to become profitable or to eventually sustain profitability

or to have positive cash flows.

increase in customer terminations would negatively affect our business by reducing OmniMetrix revenue or requiring us to spend

has had a history of incurring net losses since it was acquired by us and may never achieve sustained profitability.

OmniMetrix realized an operating profit of approximately $940,000 in 2021 and $580,000 in 2020, OmniMetrix has a history of incurring

operating losses since it was acquired by Acorn in 2012.

While OmniMetrix has significantly reduced its losses and its cash needs from

us and we expect positive cash flow from its operations in 2022, we can provide no assurance that OmniMetrix will be able to generate

sufficient revenues to allow it to sustain profitability and to have sustained positive cash flows.

increase in customer terminations would negatively affect our business by reducing OmniMetrix’s revenue or requiring us to spend

more money to grow our customer base.

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

Therefore, if we

are unsuccessful in retaining customers or are required to spend significant amounts to acquire new customers, our revenue could

decrease and our operating results could be affected.

is a relatively small company with limited resources compared to some of its current and potential competitors, which may hinder

its ability to compete effectively.

of OmniMetrix’s current and potential competitors have significantly greater resources and broader name recognition than

As a result, these competitors may have greater credibility with OmniMetrix’s existing and potential customers.

They also may be able to adopt more aggressive pricing policies and devote greater resources to the development, promotion and

sale of their products, which would allow them to respond more quickly to new or emerging technologies or changes in customer

requirements.

In particular, at the present time we are facing significant competition from generator manufacturers who offer

their own monitoring solutions.

Therefore, if we are unsuccessful

in retaining customers or are required to spend significant amounts to acquire new customers, our revenue could decrease and our operating

results could be affected.

is a relatively small company with limited resources compared to some of its current and potential competitors, which may hinder its

ability to compete effectively.

of OmniMetrix’s current and potential competitors have significantly greater resources and broader name recognition than it does.

As a result, these competitors may have greater credibility with OmniMetrix’s existing and potential customers.

They also may be

able to adopt more aggressive pricing policies and devote greater resources to the development, promotion and sale of their products,

which would allow them to respond more quickly to new or emerging technologies or changes in customer requirements.

In particular, at

the present time we are facing significant competition from certain generator manufacturers who offer their own monitoring solutions.

may not be able to access sufficient capital to support growth.

OmniMetrix is not expected to need funding from us in 2022 to support its growth and working capital needs, OmniMetrix has historically

been dependent on Acorn’s ability and willingness to provide funding to support its business and growth strategy.

our acquisition of OmniMetrix in February 2012, we have invested approximately $14.0 million and, as of December 31, 2020, have

lent approximately $2,985,000, net of repayments of approximately $570,000 in the aggregate made in 2019 and 2020, to OmniMetrix,

not including approximately $1,590,000 of accrued interest and expenses advanced to it by Acorn since 2014.

The loans included

$323,000 lent in 2019 to repay a loan from a former director.

The advances include $114,000 in accrued preferred dividends for

preferred OmniMetrix stock purchased by Acorn from a former director in connection with Acorn’s reacquisition of 19% of

OmniMetrix in 2019.

have no assurance that current cash balances plus cash flow from operations will provide sufficient liquidity for OmniMetrix’s

been dependent on Acorn’s ability and willingness to provide funding to support its business and growth strategy.

As of December

31, 2021, OmniMetrix owes Acorn approximately $4,217,000 from such funding support which includes accrued dividends of $190,000, a loan

in the principal amount of $2,985,000 and accrued interest and other advances of approximately $1,042,000.

During 2021, the intercompany

amount due to Acorn from OmniMetrix decreased by approximately $359,000.

This included repayments of approximately $677,000 offset by

interest of approximately $194,000, dividends of $76,000 due to Acorn and approximately $48,000 in shared expenses paid by Acorn.

2020, the intercompany amount due to Acorn from OmniMetrix increased by approximately $70,000.

This included repayments of approximately

$435,000 offset by interest of approximately $253,000, dividends of $76,000 due to Acorn and approximately $176,000 in shared expenses

paid by Acorn.

have no assurance that current cash balances plus cash flow from operations will provide sufficient liquidity for OmniMetrix’s

working capital needs in 2022.

Additional financing for OmniMetrix may be in the form of a bank line, a new loan or investment

by others, a loan by Acorn, or a combination of the above.

The availability and amount of any additional loans from us to OmniMetrix

may be limited by the working capital needs of our corporate activities.

Whether Acorn will have the resources necessary to provide

funding, or whether alternative funds, such as third-party loans, will be available at the time and on terms acceptable to Acorn

and OmniMetrix cannot be determined.

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

third-party products.

OmniMetrix’s

Additional financing for OmniMetrix may be in the form of a bank line, a new loan or investment by others,

a loan by Acorn, or a combination of the above.

The availability and amount of any additional loans from us to OmniMetrix may be limited

by the working capital needs of our corporate activities.

Whether Acorn will have the resources necessary to provide funding, or whether

alternative funds, such as third-party loans or investments, will be available at the time and on terms acceptable to Acorn and OmniMetrix

cannot be determined at this time.

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

end-user customer base is comprised exclusively of parties who have chosen to purchase either generators or construct gas pipelines.

OmniMetrix has no ability to control the rate at which new generators or cathodic protection systems are acquired.

of such products decline, the associated need for OmniMetrix’s products and services is expected to decline as well.

OmniMetrix is unable to keep pace with changing market or customer-mandated product and service improvements, OmniMetrix’s

results of operations and financial condition may suffer.

of OmniMetrix’s existing products may require ongoing engineering and upgrades in conjunction with market developments as

well as specific customer needs.

There can be no assurance that OmniMetrix will continue to be successful in its engineering efforts

regarding the development of its products, and future technological difficulties could adversely affect its business, results

of operations and financial condition.

cellular networks used by OmniMetrix are also subject to periodic technical updates that may require corresponding updates to,

or replacement of, OmniMetrix’s monitoring equipment.

If purchases of such

products decline, the associated need for OmniMetrix’s products and services is expected to decline as well.

OmniMetrix is unable to keep pace with changing market or customer-mandated product and service improvements, OmniMetrix’s results

of operations and financial condition may suffer.

of OmniMetrix’s existing products may require ongoing engineering and upgrades in conjunction with market developments as well

as specific customer needs.

There can be no assurance that OmniMetrix will continue to be successful in its engineering efforts regarding

the development of its products, and future technological difficulties could adversely affect its business, results of operations and

financial condition.

cellular networks used by OmniMetrix are also subject to periodic technical updates that may require corresponding updates to, or replacement

of, OmniMetrix’s monitoring equipment.

networks have evolved over time to offer more robust technical capabilities in both voice and data transmission.

At the present

time, the changes from the so-called “2G”

to “3G”

and “LTE”

service have resulted in only

limited service interruptions.

OmniMetrix anticipates, however, that as these new capabilities come online, it will be necessary

to have equipment that can readily interface with the newer cellular networks to avoid negative impacts on customer service.

all of the costs associated with OmniMetrix’s corresponding equipment upgrades can be passed on to customers, and any increased

expenses are expected to have a negative impact on OmniMetrix’s operating results.

substantial portion of OmniMetrix’s revenues are expected to be generated not from product sales, but from periodic monitoring

fees and thus it is continually exposed to risks associated with its customers’

financial stability.

At the present time,

the changes from the so-called “3G” to “4G LTE” service have resulted in only limited service interruptions.

OmniMetrix anticipates, however, that as new capabilities come online, it will be necessary to have equipment that can readily interface

with the newer cellular networks to avoid negative impacts on customer service.

Not all of the costs associated with OmniMetrix’s

corresponding equipment upgrades can be passed on to customers, and any increased expenses are expected to have a negative impact on

OmniMetrix’s operating results.

substantial portion of OmniMetrix’s revenues is expected to be generated not from product sales, but from periodic monitoring fees

and thus it is continually exposed to risks associated with its customers’ financial stability.

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

It is therefore dependent on these customers continuing to timely

pay service fees on an on-going basis.

If a significant portion of these fees are not renewed from year-to-year, OmniMetrix could

expect to experience deterioration in its financial condition.

OmniMetrix’s

ability to provide, and to collect revenues from, monitoring services is dependent on the reliability of cellular networks not

controlled by OmniMetrix.

It is therefore dependent on these customers continuing to timely pay

service fees on an on-going basis.

If a significant portion of these fees are not paid on a timely basis and/or are not renewed from

year-to-year, OmniMetrix could expect to experience deterioration in its financial condition.

ability to provide, and to collect revenues from, monitoring services is dependent on the reliability of cellular networks not controlled

by OmniMetrix.

provides monitoring services through the use of cellular and satellite technology utilizing the networks of third-party providers.

These providers generally do not warrant their services to either OmniMetrix or the end users and any dropped transmissions could

result in the loss of customer renewals and potential claims against OmniMetrix.

While OmniMetrix uses contractual measures to

limit its liability to customers, there is no assurance that such limitations will be enforced or that customers will not cancel

monitoring services due to network issues.

OmniMetrix’s

providers generally do not warrantee their services to either OmniMetrix or the end users, and any dropped transmissions could result

in the loss of customer renewals and potential claims against OmniMetrix.

While OmniMetrix uses contractual measures to limit its liability

to customers, there is no assurance that such limitations will be enforced or that customers will not cancel monitoring services due

to network issues.

business is dependent on its ability to reliably store and manage data, but there can be no guarantee that it has sufficient capabilities

to mitigate potential data loss in all cases.

efficient operation of OmniMetrix’s business is dependent on its information technology systems.

In addition, OmniMetrix’s

ability to assist customers in analyzing data related to the performance of such customers’

power and cathodic protection

monitoring systems is an important component of its customer value proposition.

OmniMetrix utilizes off-site data servers, housed

within a commercial data center utilizing accepted data and power monitoring and protection processes, but whether a data loss

can be avoided cannot be assured in every case.

OmniMetrix’s information technology systems are vulnerable to damage or

interruption from natural disasters, sabotage (including theft and attacks by computer viruses or hackers), power outages;

computer systems, Internet, telecommunications or data network failure.

Any interruption of OmniMetrix’s information technology

systems could result in decreased revenue, increased expenses, increased capital expenditures, customer dissatisfaction and potential

lawsuits, any of which could have a material adverse effect on its results of operations and financial condition.

efficient operation of OmniMetrix’s business is dependent on its information technology systems.

In addition, OmniMetrix’s

ability to assist customers in analyzing data related to the performance of such customers’ power and cathodic protection monitoring

systems is an important component of its customer value proposition.

OmniMetrix utilizes off-site data servers, housed within a commercial

data center utilizing accepted data and power monitoring and protection processes, but whether a data loss can be avoided cannot be assured

in every case.

OmniMetrix’s information technology systems are vulnerable to damage or interruption from natural disasters, sabotage

(including theft and attacks by computer viruses or hackers), power outages, and computer systems, Internet, telecommunications or data

network failure.

Any interruption of OmniMetrix’s information technology systems could result in decreased revenue, increased expenses,

increased capital expenditures, customer dissatisfaction and potential lawsuits, any of which could have a material adverse effect on

its results of operations and financial condition.

RELATED TO OUR SECURITIES

stock price is highly volatile and we do not expect to pay dividends on shares of our common stock for the foreseeable future.

Investors may never obtain a return on their investment.

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

subject to wide fluctuations.

may never obtain a return on their investment.

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

to wide fluctuations.

During 2021, our common stock traded at prices as low as $0.38 and as high as $0.70 per share.

in our stock price may continue to occur in response to various factors, many of which we cannot control, including:

Fluctuations in

our stock price may continue to occur in response to various factors, many of which we cannot control, including:

economic and political conditions and specific conditions in the markets we address;

14 unchanged sentences

and expansion of our business.

Accordingly, you will need to rely on sales of your common stock after price appreciation, which

may never occur, in order to realize a return on your investment.

Accordingly, investors will need to rely on sales of your common stock after price appreciation, which

may never occur, in order to realize a return on their investment.

share price may decline due to the large number of shares of our common stock eligible for future sale in the public market including

shares underlying warrants and options.

all of our outstanding shares of common stock are, or could upon exercise of options or warrants become, eligible for sale in

the public market as described below.

Sales of a substantial number of shares of our common stock in the public market, or the

possibility of these sales, may adversely affect our stock price.

all of our outstanding shares of common stock are, or could upon exercise of options or warrants become, eligible for sale in the public

market as described below.

Sales of a substantial number of shares of our common stock in the public market, or the possibility of these

sales, may adversely affect our stock price.

of March 28, 2022, 39,687,589 shares of our common stock were issued and outstanding.

3 unchanged sentences

our common stock.

In addition to the options noted above, at March 11, 2021, there were 341,418 options are outstanding, but have

not yet vested and are not yet exercisable.

In addition to the options noted above, at March 28, 2022, there were 355,298 options outstanding that

have not yet vested and are not yet exercisable.

Substantially

all of our currently outstanding shares and shares issuable under our outstanding options and warrants are or would be freely

all of our currently outstanding shares and shares issuable under our outstanding options and warrants are or would be freely tradable.

may have to offer additional securities for sale in the near future.

of March 11, 2021, we had consolidated cash of approximately $1.8 million which we believe is sufficient for at least the

next twelve months.

of March 28, 2022, we had consolidated cash of approximately $1,825,000 which we believe is sufficient for at least

the next twelve months.

Despite this, we may ultimately not have sufficient cash to allow us to execute our plans, and the occurrence

of one or more unanticipated events may require us to make significant expenditures.

Accordingly, we may need to raise additional

amounts to finance our operations.

If we were to do so by selling shares of our common stock and/or other securities convertible

into shares of our common stock, current investors may incur additional dilution in the value of their shares.

Accordingly, we may need to raise additional amounts

to finance our operations.

If we were to do so by selling shares of our common stock and/or other securities convertible into shares

of our common stock, current investors may incur dilution in the value of their shares.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors