What changed in this filing

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Item 1A. Risk Factors

2025-03-06 compared with 2024-03-07 · 101 added, 174 removed, 208 unchanged (57% of the section changed)

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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 investments.

we have had several consecutive quarters of profitability at our OmniMetrix subsidiary, we have had a history of losses from our OmniMetrix

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 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 21.02% of the Company’s stock, and Tracy Clifford, CFO of Acorn

and COO of OmniMetrix.

Acting CEO of OmniMetrix, who beneficially owns approximately 21.07% of the Company’s stock, and Tracy Clifford, CFO of Acorn and

COO of OmniMetrix.

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

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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.

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

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.

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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

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number of market markers in shares of our common stock;

availability of information concerning the trading prices and volume of shares of our common stock;

number of broker-dealers willing to execute trades in shares of our common stock.

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

“Risks Related to Our Securities” below.

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

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

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 acquisitions 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.

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in establishing and maintaining uniform standards, controls, procedures and policies, including accounting controls and procedures.

incur substantial costs as a result of being a public company.

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

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

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, 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.

have reported material weaknesses in internal controls over financial reporting as of December 31, 2024 and we cannot assure you that

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

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

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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.

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.

circumvented by the individual acts of some people, by the 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.

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

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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.

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.

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

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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.

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bank and amounted to $2,326,000 at December 31, 2024.

We had one customer that represented

25% of the accounts receivable at December 31, 2023.

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.

are dependent on information technology and our systems and infrastructure face certain risks, including from cybersecurity breaches

and data leakage.

We had one customer, the party to

the Material Contract, as defined below under Other Matters in Item 7.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations, which represented 61% of the accounts receivable at December 31, 2024 of which 53%

was collected as of March 4, 2025 .

Typically, credit risk with respect to

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

However, at December

31, 2024, the balance of accounts receivable under the Material Contract was the majority of the outstanding balance of accounts receivable.

Although we do not believe there is a significant risk of non-performance by this customer, any failures or defaults on their part could

negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial

are dependent on information technology and our systems and infrastructure face certain risks, including cybersecurity breaches and data

rely extensively on information technology systems, networks and services, including internet sites, data hosting and processing facilities

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corruption, destruction or interruption of critical information technology systems or infrastructure, by our workforce, others with authorized

access to our systems or unauthorized persons could negatively impact operations.

access to our systems or unauthorized persons could negatively impact our operations.

The ever-increasing use and evolution of technology,

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

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 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.

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

We have invested in appropriate industry 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 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

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 $1,131,000 in 2023 and $330,000 in 2022, 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 2024, 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.

or other monitoring service terminations could increase in the future due to customer dissatisfaction with our products and services,

increased competition from other providers or alternative technologies.

our historical renewal rate is greater than 90%, non-renewals or other monitoring service terminations could increase in the future due

to customer dissatisfaction with our products and services, increased competition from other providers or alternative technologies.

we have an increase in our non-renewal rate, we will have to acquire new customers on an ongoing basis just to maintain our existing

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As a result, marketing expenditures are an ongoing requirement of our business.

We incur significant

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/or our operating

results could be affected.

We incur costs to acquire

new customers, and those costs are a 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/or our operating results could

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

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

OmniMetrix is not expected to need funding from us in 2024 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.

As of December

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

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

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

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

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

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

of operations and financial condition may suffer.

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

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

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

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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.

There is no assurance 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

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to wide fluctuations.

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:

During 2024, our common stock traded at prices as low as $5.76 and as high as $19.35 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;

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and expansion of our business.

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

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

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

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of March 4, 2025, 2,491,130 shares of our common stock were issued and outstanding.

As of that date we had 79,168 options outstanding

and exercisable with a weighted average exercise price of $6.41 per share, which if exercised would result in the issuance of additional

shares of our common stock.

In addition to the options noted above, at March 5, 2024, there were 13,703 options outstanding that have

not yet vested and are not yet exercisable.

As of that date, we had 68,089 options

outstanding and exercisable with a weighted average exercise price of $6.80 per share, which if exercised would result in the

issuance of additional shares of our common stock.

In addition to the options noted above, at March 4, 2025, there were 8,960

options outstanding that have not yet vested and are not yet exercisable.

Substantially

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of March 4, 2025, we had consolidated cash of $2,800,000 which we believe is sufficient for at least the next twelve months.

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.

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.

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.

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.

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