What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-03-07 compared with 2023-03-16 · 101 added, 156 removed, 281 unchanged (48% of the section changed)

7 unchanged sentences

subsidiary plus 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 financing.

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

of these possible sources to provide additional liquidity.

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

consolidated financial statements contained in this Annual Report, we may need to seek additional sources of funding for long-term

corporate costs or if OmniMetrix were not to grow at the rate anticipated and needed additional funds for their operations.

Additional sources of funding may include additional loans from related and/or non-related parties, partial sale of, or finding a

strategic partner for, OmniMetrix or equity financing.

There can be no assurance additional funding will be available at acceptable

terms or that we will be able to successfully utilize any of these possible sources to provide additional liquidity.

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, CEO of Acorn

and Acting CEO of OmniMetrix, who beneficially owns approximately 20.5% of the Company’s stock, Tracy Clifford, CFO of Acorn

and COO of OmniMetrix , and Harold Jarrett, our CTO.

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, CEO of Acorn and

Acting CEO of OmniMetrix, who beneficially owns approximately 21.02% of the Company’s stock, and Tracy Clifford, CFO of Acorn

and COO of OmniMetrix.

The loss of the services of either 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.

40 unchanged sentences

reports relating to trends in our markets or general economic conditions.

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 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 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 regulations of corporate governance, public disclosure and financial accounting standards may result in additional expenses

42 unchanged sentences

operations or financial condition.

have reported material weaknesses in internal controls over financial reporting as of December 31, 2022 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.

have reported material weaknesses in internal controls over financial reporting as of December 31, 2023 and we cannot assure you

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

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 of our consolidated financial statements, 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

12 unchanged sentences

not be detected.

Any failure to maintain

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

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

in our financial statements.

Any 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.

failure to maintain or implement required new or improved controls, or any difficulties we encounter in their implementation, could

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

result in material misstatements in our financial statements.

Any 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 our consolidated financial

statements, cause us to fail to timely meet our reporting obligations and cause investors to lose confidence in our reported

financial information.

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

39 unchanged sentences

or appropriate insurance at affordable prices for the required limits.

Our failure to obtain such insurance could lead to uninsured

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

with our contractual obligations.

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.

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 no longer accept the terms we have

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

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.

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 no longer accept the terms we have been able to procure and seek to

terminate our existing contracts or cease to do business with us.

financial instruments could subject us to concentrations of credit risk.

20 unchanged sentences

of confidential information stored in our, or our third-party providers’ systems, portable media or storage devices.

We could also

experience a business interruption, theft of confidential information or reputational damage from industrial espionage attacks, malware

or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party

As the COVID-19 pandemic progressed, there was an increase in cybersecurity incidents across all industries, predominantly

ransomware and social engineering attacks.

also experience a business interruption, theft of confidential information or reputational damage from industrial espionage attacks,

malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party

There has been an increase in cybersecurity incidents across all industries, predominantly ransomware and social engineering

Further, government entities have also been the subject of cyberattacks.

As the cyber-threat

landscape evolves, these attacks are growing in frequency, sophistication and intensity, and due to the nature of some of these attacks,

there is also a risk that they may remain undetected for a period of time.

We have invested in industry-appropriate protections and monitoring

practices of our data and IT to reduce these risks and continue to monitor our systems on an ongoing basis for any current or potential

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

any incurred losses.

Moreover, as cyber-attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance

in amounts and on terms we view as appropriate for our operations.

There can be no assurance that our continuing efforts will prevent

breakdowns or breaches to our or our third-party providers’ databases or systems that could adversely affect our business.

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.

a result of the COVID-19 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.

The full extent to which the COVID-19 pandemic

may affect our results of operations, financial condition and cash flows will depend on future developments that are highly uncertain.

pandemic could adversely affect our workforce resulting in serious health issues and absenteeism.

The pandemic could also substantially

interfere with general commercial activity related to our supply chain and customer base, which could have a material adverse effect

on our financial condition, results of operations, business, or prospects.

Some of the electronic devices and hardware we purchase, like

antennas, radios, and GPS modules are very specific to our application;

there are not likely to be practical alternatives.

In some cases,

our circuit boards were designed around specific electronic hardware that met our specifications.

We are working closely with our contract

manufacturers and suppliers in order to mitigate as much as possible the risks to our supply chain for these critical devices and hardware,

including identifying any lead-time issues and any potential alternate sources.

We are also examining all currently open purchase orders

in an effort to identify whether we need to issue additional orders to secure product that is critical, already has questionable lead

times and/or is unique to our requirements.

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.

As the cyber-threat landscape evolves, these attacks

are growing in frequency, sophistication and intensity, and due to the nature of some of these attacks, there is also a risk that they

may remain undetected for a period of time.

We have invested in industry-appropriate protections and monitoring practices of our data

and IT and have established a Cybersecurity Steering Committee to reduce these risks and continue to monitor our systems on an ongoing

basis for any current or potential threats.

While we have purchased cybersecurity insurance, there are no assurances that the coverage

would be adequate in relation to any incurred losses.

Moreover, as cyber-attacks increase in frequency and magnitude, we may be unable

to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations.

There can be no assurance that our

continuing efforts will prevent breakdowns or breaches of our and/or our third-party providers’ databases or systems that could

adversely affect our business.

RELATED TO OMNIMETRIX

30 unchanged sentences

As of December

31, 2022, OmniMetrix owes Acorn $3,677,000 from such funding support which includes accrued dividends of $266,000, a loan in the principal

amount of $2,985,000 and accrued interest and other advances of $426,000.

During 2022, the intercompany amount due to Acorn from OmniMetrix

decreased by $540,000.

This included repayments of $985,000 offset by interest of $179,000, dividends of $76,000 due to Acorn and $190,000

in shared expenses paid by Acorn.

During 2021, the intercompany amount due to Acorn from OmniMetrix decreased by $359,000.

This included

repayments of $677,000 offset by interest of $194,000, dividends of $76,000 due to Acorn and $48,000 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 2023.

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.

31, 2023, OmniMetrix owes Acorn $2,657,000 from such funding support which includes accrued dividends of $342,000, a loan with an outstanding

principal amount of $2,304,000 and accrued interest and other advances of $11,000.

During 2023, the intercompany amount due to Acorn

from OmniMetrix decreased by $1,020,000.

This included repayments of $1,285,000 offset by interest of $164,000, dividends of $76,000

due to Acorn and $25,000 in shared expenses paid by Acorn.

During 2022, the intercompany amount due to Acorn from OmniMetrix decreased

This included repayments of $985,000 offset by interest of $179,000, dividends of $76,000 due to Acorn and $190,000 in shared

expenses paid by Acorn.

This intercompany balance is eliminated in consolidation.

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

consolidated financial statements contained in this Annual Report, we may need to seek additional sources of funding for long-term

corporate costs or if OmniMetrix were not to grow at the rate anticipated and needed additional funds for their operations.

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

which could then facilitate a loan by Acorn to OmniMetrix, or any combination thereof.

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

13 unchanged sentences

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 “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.

For example, the changes

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

OmniMetrix anticipates,

however, that as new capabilities come online, it will be necessary to have equipment that can readily interface with the newer cellular

networks to avoid negative impacts on customer service.

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

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

19 unchanged sentences

systems is an important component of its customer value proposition.

OmniMetrix utilizes Microsoft Azure cloud-hosted data servers

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

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.

OmniMetrix utilizes Microsoft Azure cloud-hosted data servers 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

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

3 unchanged sentences

to wide fluctuations.

During 2022, our common stock traded at prices as low as $0.26 and as high as $0.63 per share.

Fluctuations in

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

During 2023, on an as-adjusted basis to take into account the September 2023 1-for-16 reverse stock split, our

common stock traded at prices as low as $4.00 and as high as $8.50 per share.

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;

18 unchanged sentences

shares underlying options.

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

market as described below.

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

sales, may adversely affect our stock price.

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

described below.

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

may adversely affect our stock price.

of March 5, 2024, 2,487,307 shares of our common stock were issued and outstanding.

13 unchanged sentences

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