ACORN ENERGY, INC. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2026 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-33886 ACORN ENERGY, INC. (Exact name of registrant as specified in its charter) Delaware 22-2786081 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1000 N West Street , Suite 1200 , Wilmington , Delaware 19801 (Address of principal executive offices) (Zip Code) 770 - 209-0012 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share ACFN The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Class Outstanding at May 5, 2026 Common Stock, $ 0.01 par value per share 2,508,258 ACORN ENERGY, INC. Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 2026 TABLE OF CONTENTS PAGE PART I Financial Information Item 1. Unaudited Condensed Consolidated Financial Statements: 2 Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025 2 Condensed Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2026 and 2025 3 Condensed Consolidated Statements of Changes in Equity (unaudited) for the three months ended March 31, 2026 and 2025 4 Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2026 and 2025 5 Notes to Condensed Consolidated Financial Statements (unaudited) 6 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3. Quantitative and Qualitative Disclosures About Market Risk 24 Item 4. Controls and Procedures 24 PART II Other Information Item 5. Other Information 25 Item 6. Exhibits 25 Signatures 26 Certain statements contained in this report are forward-looking in nature. These statements are generally identified by the inclusion of phrases such as “we expect”, “we anticipate”, “we believe”, “we estimate” and other phrases of similar meaning. Whether such statements ultimately prove to be accurate depends upon a variety of factors that may affect our business and operations. Many of these factors are described in our most recent Annual Report on Form 10-K as filed with the Securities and Exchange Commission. 1 PART I ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ACORN ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) As of March 31, 2026 As of December 31, 2025 (Unaudited) ASSETS Current assets: Cash $ 4,257 $ 4,454 Accounts receivable, net 840 887 Inventory 1,196 1,254 Other current assets 225 267 State income tax receivable 51 21 Deferred cost of goods sold (COGS) 25 70 Total current assets 6,594 6,953 Property and equipment, net 364 383 Intangibles, net 266 17 Right-of-use assets, net 921 963 Other assets 112 119 Deferred tax assets 4,871 4,899 Total assets $ 13,128 $ 13,334 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 213 $ 306 Accrued expenses 140 171 Deferred revenue 2,934 3,097 Current operating lease liabilities 163 158 Other current liabilities 29 46 State income tax payable — 18 Total current liabilities 3,479 3,796 Long-term liabilities: Deferred revenue 335 312 Noncurrent operating lease liabilities 838 884 Other long-term liabilities 27 26 Total liabilities 4,679 5,018 Commitments and contingencies (Note 8) - - Equity: Acorn Energy, Inc. stockholders Common stock - $ 0.01 par value per share: Authorized - 42,000,000 shares; issued - 2,557,937 at March 31, 2026 and 2,555,717 at December 31, 2025; outstanding - 2,506,846 at March 31, 2026 and 2,504,626 at December 31, 2025 25 25 Additional paid-in capital 103,828 103,621 Accumulated stockholders’ deficit ( 92,421 ) ( 92,344 ) Treasury stock, at cost – 51,091 shares at March 31, 2026 and December 31, 2025 ( 3,052 ) ( 3,052 ) Total Acorn Energy, Inc. stockholders’ equity 8,380 8,250 Non-controlling interests 69 66 Total equity 8,449 8,316 Total liabilities and equity $ 13,128 $ 13,334 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 ACORN ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA) 2026 2025 Three months ended March 31, 2026 2025 Revenue $ 2,227 $ 3,098 COGS 442 772 Gross profit 1,785 2,326 Operating expenses: Research and development (R&D) expenses 255 291 Selling, general and administrative (SG&A) expenses 1,659 1,431 Total operating expenses 1,914 1,722 Operating (loss) income ( 129 ) 604 Interest income, net 31 24 (Loss) income before income taxes ( 98 ) 628 (Benefit from) provision for income taxes ( 25 ) 154 Net (loss) income ( 73 ) 474 Non-controlling interest share of income ( 4 ) ( 10 ) Net (loss) income attributable to Acorn Energy, Inc. stockholders $ ( 77 ) $ 464 Basic and diluted net (loss) income per share attributable to Acorn Energy, Inc. stockholders: Net (loss) income per share attributable to Acorn Energy, Inc. stockholders – basic and diluted $ ( 0.03 ) $ 0.19 Weighted average number of shares outstanding attributable to Acorn Energy, Inc. stockholders – basic and diluted: Basic 2,506 2,491 Diluted 2,506 2,498 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 ACORN ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) (IN THOUSANDS) Number of Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Deficit Number of Treasury Shares Treasury Stock Total Acorn Energy, Inc. Stockholders’ Equity Non- controlling interests Total Equity Three Months Ended March 31, 2026 Number of Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Deficit Number of Treasury Shares Treasury Stock Total Acorn Energy, Inc. Stockholders’ Equity Non- controlling interests Total Equity Balances as of December 31, 2025 2,505 $ 25 $ 103,621 $ ( 92,344 ) 51 $ ( 3,052 ) $ 8,250 $ 66 $ 8,316 Net loss — — — ( 77 ) — — ( 77 ) 4 ( 73 ) Exercise of stock options 2 - * 10 — — — 10 — 10 Accrued dividend in OmniMetrix preferred shares — — — — — — — ( 1 ) ( 1 ) Stock-based compensation — — 197 — — — 197 — 197 Balances as of March 31, 2026 2,507 $ 25 $ 103,828 $ ( 92,421 ) 51 $ ( 3,052 ) $ 8,380 $ 69 $ 8,449 Three Months Ended March 31, 2025 Number of Shares Outstanding Common Stock Additional Paid-In Capital Accumulated Deficit Number of Treasury Shares Treasury Stock Total Acorn Energy, Inc. Stockholders’ Equity Non- controlling interests Total Equity Balances as of December 31, 2024 2,491 $ 25 $ 103,405 $ ( 94,854 ) 50 $ ( 3,036 ) $ 5,540 $ 36 $ 5,576 Balances 2,491 $ 25 $ 103,405 $ ( 94,854 ) 50 $ ( 3,036 ) $ 5,540 $ 36 $ 5,576 Net income — — — 464 — — 464 10 474 Net (loss) income — — — 464 — — 464 10 474 Accrued dividend in OmniMetrix preferred shares — — — — — — — ( 1 ) ( 1 ) Stock-based compensation — — 61 — — — 61 — 61 Balances as of March 31, 2025 2,491 $ 25 $ 103,466 $ ( 94,390 ) 50 $ ( 3,036 ) $ 6,065 $ 45 $ 6,110 Balances 2,491 $ 25 $ 103,466 $ ( 94,390 ) 50 $ ( 3,036 ) $ 6,065 $ 45 $ 6,110 * less than $1 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 ACORN ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) 2026 2025 Three months ended March 31, 2026 2025 Cash flows provided by operating activities: Net (loss) income $ ( 73 ) $ 474 Depreciation and amortization 30 30 Deferred income tax benefit 28 125 Increase (decrease) in the provision for credit losses 1 ( 1 ) Non-cash lease expense 58 32 Stock-based compensation 197 61 Change in operating assets and liabilities: Decrease (increase) in accounts receivable 46 ( 126 ) Decrease (increase) in inventory 58 ( 484 ) Decrease in deferred COGS 45 135 Decrease in other current assets and other assets 49 17 (Increase) decrease in state income tax receivable ( 30 ) 10 Decrease in deferred revenue ( 140 ) ( 278 ) Decrease in operating lease liability ( 57 ) ( 37 ) (Decrease) increase in state income tax payable ( 18 ) 15 (Decrease) increase in accounts payable, accrued expenses, other current liabilities and non-current liabilities ( 141 ) 298 Net cash provided by operating activities 53 271 Cash flows used in investing activities: Equipment and trade show booth purchases ( 3 ) ( 6 ) Payment for exclusive distribution and commercialization rights ( 250 ) — Investments in technology ( 7 ) — Net cash used in investing activities ( 260 ) ( 6 ) Cash flows provided by financing activities: Stock option exercise proceeds 10 — Net cash provided by financing activities 10 — Net (decrease) increase in cash ( 197 ) 265 Cash at the beginning of the period 4,454 2,326 Cash at the end of the period $ 4,257 $ 2,591 Supplemental cash flow information: Cash paid during the year for: Income taxes $ — $ 4 Non-cash investing and financing activities: Accrued preferred dividends to former CEO of OmniMetrix $ 1 $ 1 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 ACORN ENERGY, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED STATEMENTS (UNAUDITED) NOTE 1— BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Acorn Energy, Inc. (“Acorn”) and its subsidiaries, OmniMetrix, LLC (“OmniMetrix”) and OMX Holdings, Inc. (collectively, with Acorn and OmniMetrix, “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The December 31, 2025 consolidated balance sheet data were derived from audited financial statements but do not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. All dollar amounts, except per share data, are rounded to the nearest thousand; thus, they are approximate. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on March 5, 2026. NOTE 2— ACCOUNTING POLICIES Use of Estimates in Preparation of Financial Statements The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. As applicable to these unaudited consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to valuation allowance. Concentrations of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and trade accounts receivable. The Company’s cash was deposited with a U.S. bank and amounted to $ 4,257,000 at March 31, 2026. The Company does not believe there is a significant risk of non-performance by its counterparties. For the three-month period ended March 31, 2026, there was one customer that represented 10 % of the Company’s total invoiced revenue. At March 31, 2026, the Company had one customer that represented 28 % of our total accounts receivable due by June 30, 2026 based on the customer’s payment terms. The customer with this concentration of both invoiced revenue and accounts receivable is the customer under a material contract that was executed in June 2024. Approximately 42 % of the accounts receivable at December 31, 2025 was due from this customer which was subsequently collected in full. Credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising the Company’s customer base. 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. 6 Inventory Inventories are comprised of components (raw materials) and finished goods, which are measured at the lower of cost or net realizable value. Raw materials inventory is generally comprised of radios, cables, antennas, and electrical components. Finished goods inventory consists of fully assembled systems ready for final shipment to the customer. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and applicable shipping costs. All inventories are periodically reviewed to identify slow-moving and obsolete inventory. Management conducts an assessment at the end of each reporting period of the Company’s inventory reserve and writes off any inventory items that are deemed obsolete. Management conducted an assessment and determined there was no inventory write-off necessary for the three-month periods ended March 31, 2026 and 2025. Intangibles The Company’s intangible assets are subject to amortization and are amortized over the estimated useful life in proportion to the economic benefits received. The Company evaluates the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. Revenue Recognition The Company’s revenue recognition policy is consistent with applicable revenue recognition guidance and interpretations. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes: (1) identifying contracts with customers, (2) identifying performance obligations within those contracts, (3) determining the transaction price, (4) allocating the transaction price to the performance obligation in the contract, which may include an estimate of variable consideration, and (5) recognizing revenue when or as each performance obligation is satisfied. The Company assesses whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring. The Company’s sales arrangements generally include standard payment terms. These terms effectively relate to all customers, products, and arrangements regardless of customer type, product mix or arrangement size. See Note 12, Revenue, for further discussion. Product revenues are recognized at the point in time when control of the product is transferred to the customer, which typically occurs upon shipment or delivery except to the one customer under a material contract for which this occurs upon acceptance. To determine when control has transferred, the Company considers if there is a present right to payment and if legal title, physical possession, and the significant risks and rewards of ownership of the asset has transferred to the customer. Revenue from the prepayment of monitoring fees (generally paid twelve months in advance) are recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period. This method provides a faithful depiction of the transfer of services as it aligns the recognition of revenue with the period in which the monitoring services are provided. By deferring the revenue and recognizing it over the service period, the financial statements accurately reflect the Company’s performance and obligations to its customers. See Notes 11 and 12 for the disaggregation of the Company’s revenue for the periods presented. Any sales tax, value added tax, and other tax the Company collects concurrent with revenue producing activities are excluded from revenue. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and the tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred assets and liabilities is recognized in income in the period that includes the enactment date. 7 The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for incomes taxes. During the year ended December 31, 2025, the Company recorded a reduction in the valuation allowance of $ 1,074,000 that was previously recorded against our deferred tax assets. During the three months ended March 31, 2026, there was no change in the valuation allowance. As of December 31, 2025 and March 31, 2026, we believe, based on our projections, that a partial valuation allowance of $ 10,326,000 is necessary against our deferred tax assets. Management will continue to assess the need for the valuation allowance and will make adjustments when appropriate. Management’s projections and beliefs are based upon a variety of estimates and numerous assumptions made by our management with respect to, among other things, interest rates, forecasted revenue of the hardware sales and monitoring revenue or revenue streams that could generate sufficient income so that the Company can utilize our net operating loss (NOL) carryforwards and other matters, many of which are difficult to predict, are subject to significant uncertainties and are beyond our control. As a result, there is inherently uncertainty that the estimates and assumptions upon which these projections and beliefs are based will prove to be accurate, that the anticipated results will be realized or that the actual results will not be substantially higher or lower than the Company projected. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the company recognizes the largest amount of tax benefit that more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying unaudited condensed consolidated statements of operations. No accrued interest or penalties were required to be included in the related tax liability line in the unaudited condensed consolidated balance sheet as of March 31, 2026 and in the consolidated balance sheet as of December 31, 2025. Basic and Diluted Net (Loss) Income Per Share Basic net (loss) income per share is computed by dividing the net (loss) income attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the period, excluding treasury stock. Diluted net (loss) income per share is computed by dividing the net (loss) income by the weighted average number of shares outstanding plus the dilutive potential of common shares which would result from the exercise of stock options and warrants. The dilutive effects of stock options are excluded from the computation of diluted net (loss) income per share if doing so would be antidilutive. The combined weighted average number of options that were excluded from the computation of diluted income per share, as they had an antidilutive effect, was 112,000 (which have a weighted average exercise price of $ 12.79 ) and 7,000 (which had a weighted average exercise price of $ 17.51 ) for the three-month periods ended March 31, 2026 and 2025, respectively. The following data represents the amounts used in computing (loss) earnings per share and the effect on net (loss) income and the weighted average number of shares of dilutive potential common stock (in thousands, except per share data): SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES 2026 2025 Three months ended March 31, 2026 2025 Net (loss) income attributable to common stockholders $ ( 77 ) $ 464 Weighted average shares outstanding: -Basic 2,506 2,491 Add: Stock options — 7 -Diluted 2,506 2,498 Basic and diluted net income per share $ ( 0.03 ) $ 0.19 8 Recent Accounting Pronouncements In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued Accounting Standards Update No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for us for our annual reporting for fiscal 2027 and for interim period reporting beginning in fiscal 2028 on a prospective basis. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures. Recently Adopted Accounting Standards In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-05, which introduces a practical expedient and an accounting policy election for estimating expected credit losses on current accounts receivable and contract assets arising from revenue transactions under ASC Topic 606. The practical expedient allows entities to assume that current conditions as of the reporting date remain unchanged over the remaining life of the asset, thereby eliminating the need to incorporate forecasts of future economic conditions. The accounting policy election, available to entities other than public business entities, permits consideration of post-balance sheet cash collections in estimating expected credit losses, provided the practical expedient is also elected. Although the Company qualifies as a public business entity and is therefore not eligible for the accounting policy election, the Company evaluated the practical expedient and determined that it did not have a material impact on its consolidated financial statements upon adoption effective January 1, 2026. NOTE 3— LIQUIDITY The Company expects that its existing cash as of March 31, 2026 of $ 4,257,000 will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of these financial statements. At March 31, 2026, the Company had working capital of $ 3,115,000 . Its working capital includes $ 4,257,000 of cash and deferred revenue of $ 2,934,000 . Such deferred revenue does not require a significant cash outlay for the revenue to be recognized. Total deferred revenue decreased by $ 140,000 , from $ 3,409,000 at December 31, 2025 to $ 3,269,000 at March 31, 2026, as a result of the sales mix of products sold. Based on the current products being sold, the Company expects continued decreases in the deferred revenue balance in the foreseeable future (see Note 12, Revenue). The balance of deferred hardware revenue at March 31, 2026 will continue to be amortized over the months remaining in the three-year period since the hardware’s original date of shipment. Net cash decreased during the three-month period ended March 31, 2026 by $ 197,000 , with $ 53,000 provided by operating activities, $ 260,000 used in investing activities of which $ 250,000 was the payment pursuant to the technology partnership agreement executed January 1, 2026, and $ 10,000 provided by financing activities. 9 NOTE 4— ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES The Company has historically experienced immaterial write-offs given the nature of the customers that receive credit. As of March 31, 2026, the Company had gross receivables of $ 846,000 and an allowance for credit losses of $ 6,000 . SCHEDULE OF ACCOUNTS RECEIVABLE For the three months ended March 31, 2026 For the year ended December 31, 2025 (in thousands) Accounts Receivable, net, beginning of period $ 887 $ 1,933 Accounts Receivable, net, end of period $ 840 $ 887 The following is a tabular reconciliation of the Company’s allowance for credit losses: SCHEDULE OF ALLOWANCES FOR CREDIT LOSSES March 31, 2026 December 31, 2025 For the three months ended March 31, 2026 For the year ended December 31, 2025 (in thousands) Balance at beginning of period $ 5 $ 4 Increase in provision for credit losses 1 1 Balance at end of period $ 6 $ 5 NOTE 5— INVENTORY SCHEDULE OF INVENTORY March 31, 2026 December 31, 2025 As of March 31, 2026 December 31, 2025 (in thousands) Raw materials $ 1,108 $ 702 Finished goods 88 552 Inventory net $ 1,196 $ 1,254 At March 31, 2026 and December 31, 2025, the Company’s inventory reserve for obsolescence was $ 6,000 . NOTE 6— INTANGIBLES, NET On January 1, 2026, OmniMetrix entered into a Technology Partnership Agreement (the “AIO Agreement”) with AIO Systems Ltd., an Israeli technology company (“AIO”). Under the AIO Agreement, OmniMetrix obtained the exclusive right to market, distribute, integrate, and sell AIO’s centralized monitoring and management related products and services. The Company evaluated payment and concluded that the payment represents consideration for the acquisition of identifiable intangible rights and deliverables, principally consisting of (i) the exclusive distribution rights granted in the Territory, as defined in the AIO Agreement, and (ii) the contractually required market-readiness deliverables. The AIO Agreement has been classified as a finite-lived intangible asset and will be amortized on a straight-line basis over its estimated useful life of five ( 5 ) years, which corresponds to the minimum contractual performance period of the AIO Agreement. Amortization will commence when the asset is available for its intended use, which the Company has determined to be the date AIO completes installation of the operational demonstration unit which occurred on April 24, 2026. This is the date on which OmniMetrix is first able to commence its commercialization activities under the AIO Agreement. There was no amortization expense related to the intangible asset in the three months period ended March 31, 2026. 10 Patents are amortized over the patent term which on average is twenty years . SCHEDULE OF INTANGIBLES, NET Useful Life (in years) March 31, 2026 December 31, 2025 Estimated As of Useful Life (in years) March 31, 2026 December 31, 2025 (in thousands) Cost: Exclusive distribution and commercialization rights 5 $ 250 $ — Patents Patent term 22 22 Cost 272 22 Accumulated depreciation and amortization Exclusive distribution and commercialization rights — Patents 6 5 Accumulated depreciation and amortization 6 5 Intangibles, net $ 266 $ 17 Estimated future amortization expense will be presented in the table below in subsequent periodic reports following the placed-in-service date: SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSES Year ended March 31, 2027 51 2028 51 2029 51 2030 51 2031 51 Thereafter 11 Total $ 266 NOTE 7— LEASES OmniMetrix leases office space and office equipment under operating lease agreements. The office lease, originally set to expire on September 30, 2025 , was amended on June 20, 2025, to extend the lease term through November 30, 2030. The amendment also includes scheduled increases in monthly base, as well as a tenant improvement allowance of up to $ 14,000 for qualifying alterations if completed by September 30, 2026. The Company concluded the amendment constitutes a modification event under ASC 842 and the Company reassessed and remeasured the lease. The Company remeasured the lease payments based on the updated lease term, incremental borrowing rate and adjusted the right of use asset and lease liability accordingly. The lease was determined to still represent an operating lease. Operating lease payments for the three-month periods ended March 31, 2026 and 2025 was $ 57,000 and $ 32,000 . The present value of future minimum lease payments on non-cancelable operating leases as of March 31, 2026 using a discount rate of 6.0 % is $ 1,001,000 . The 6.0 % discount rate used is the incremental borrowing rate (established at the commencement of the lease), which, as defined in ASC 842: Leases, is the rate of interest that a lessee would have to pay to borrow, on a collateralized basis, over a similar term and in a similar economic environment, an amount equal to the lease payments. Supplemental cash flow information related to leases consisted of the following (in thousands): SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES For the three months ending March 31, 2026 2025 Cash paid for operating lease liabilities $ 57 $ 32 Supplemental balance sheet information related to leases consisted of the following: SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES As of March 31, 2026 Weighted average remaining lease terms for operating leases 4.67 11 The table below reconciles the undiscounted future minimum lease payments under non-cancellable lease agreements having initial terms of more than one year to the total operating lease liabilities recognized on the unaudited condensed consolidated balance sheet as of March 31, 2026 (in thousands): SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Year ended March 31, 2027 218 2028 242 2029 251 2030 261 2031 179 Total undiscounted cash flows $ 1,151 Less: Imputed interest ( 150 ) Present value of operating lease liabilities (a) $ 1,001 (a) Includes current portion of $ 163,000 for operating leases. On July 6, 2021, the Company entered into an agreement with King Industrial Realty, Inc., to sublease from the Company 1,900 square feet of office space of the Company’s 21,000 square feet of office and production space in the Hamilton Mill Business Park located in Buford, Georgia. This sublease was amended on August 15, 2025 to extend the term through September 30, 2028 and to provide a monthly sublease payment of $ 3,374 (plus an annual escalator each year of 4%) which includes the base rent plus a pro-rata share of utilities, property taxes and insurance. Fifty percent of any excess rent received above the per square foot amount that the Company pays is remitted to the Company’s landlord less the allocation of any shared expenses and leasehold improvements specific to the sublease. For the three-month period ended March 31, 2026, after the offset of investment in leasehold improvements and other expenses related to the sublease, the total amount paid to our landlord under the sublease was $ 1,672 . Below are the future gross payments expected to be received by the Company under the sublease (in thousands): SCHEDULE OF SUBLEASES Year ended March 31, 2027 41 2028 43 2029 22 Total undiscounted cash flows $ 106 NOTE 8— COMMITMENTS AND CONTINGENCIES The Company has $ 1,151,000 in operating lease obligations payable through 2030 and $ 603,000 in other contractual obligations which includes purchase commitments, contractual services and software license agreements. The contractual services include $ 220,000 payable through March 31, 2027. The software license agreements of $ 16,000 are all payable through March 31, 2027. The Company also has $ 367,000 in open purchase order commitments payable through September 20, 2026 of which $ 272,000 ( 74 %) is to one electronics vendor. As it relates to the AIO Agreement described in Note 6, the Company has commitments to share a defined portion of monitoring and SaaS-related revenue generated under the agreement with AIO The Company is obligated to remit to AIO a share of (i) the Company’s revenue from ongoing monitoring contracts utilizing AIO’s products, net of data, communication, cloud server, and billing costs, and (ii) the Company’s revenue from SaaS arrangements involving AIO’s products, net of the cost of products sold, installation costs, and other directly attributable costs. The applicable share is initially 50%, and is reduced to 43% once cumulative amounts paid to AIO under this provision exceed $2.0 million, and further reduced to 34% once cumulative amounts paid exceed $4.0 million. Amounts due are to be calculated and remitted on a quarterly basis. 12 NOTE 9— STOCKHOLDERS’ EQUITY (a) General At March 31, 2026, Acorn had 2,557,937 shares issued and 2,506,846 shares outstanding of its common stock, par value $ 0.01 per share. Holders of outstanding common stock are entitled to receive dividends when and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company. The Company is no t authorized to issue preferred stock. Accordingly, no preferred stock is issued or outstanding. (b) Summary Employee Option Information The Company’s stock option plans provide for the grant to officers, directors and employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money” at the end of the option term, it is automatically exercised “net.” In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the option holder but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable for one share of the Company’s common stock. Most options expire within five to ten years from the date of the grant and generally vest over a three-year period from the date of the grant. At March 31, 2026, 735 options were available for grant under the Amended and Restated 2006 Stock Incentive Plan, and no options were available for grant under the 2006 Stock Option Plan for Non-Employee Directors. During the three-month period ended March 31, 2026, 62,500 options were issued. The options were issued as follows: an aggregate of 12,500 to directors (excluding the CEO), 25,000 to the CEO and 25,000 to the CFO. In the three-month period ended March 31, 2026, there were no grants to non-employees (other than the directors, CEO and CFO). During the three-month period ended March 31, 2026, 2,220 options were exercised. The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages): SCHEDULE OF BLACK-SCHOLES OPTION PRICING ESTIMATE FAIR VALUE Number of Options (in shares) Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding at December 31, 2025 63,311 $ 7.73 3.3 years $ 476,000 Granted 62,500 19.02 Exercised ( 2,220 ) 4.99 Outstanding at March 31, 2026 123,591 $ 13.49 5.0 years $ 556,000 Exercisable at March 31, 2026 67,038 $ 9.05 3.5 years $ 543,000 The fair value of the options granted during the three-month period ended March 31, 2026 was estimated to be $ 841,000 on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions: SCHEDULE OF STOCK OPTIONS FAIR VALUE ASSUMPTIONS ESTIMATED USING BLACK-SCHOLES Risk-free interest rate 3.86 % Expected term of options 5.5 years Expected annual volatility 83.8 % Expected dividend yield — % (c) Stock Option Compensation Expense Stock option compensation expense included in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations was $ 197,000 and $ 61,000 for the three-month periods ended March 31, 2026 and 2025, respectively. The total compensation cost related to non-vested awards not yet recognized was $ 653,000 as of March 31, 2026 which will be recognized over the next eleven quarters. 13 NOTE 10— INCOME TAXES The Company’s quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the period presented. To determine the annual effective tax rate, the Company estimates both the total income (loss) before income taxes for the full year and the jurisdictions in which that income (loss) is subject to tax. The actual effective tax rate for the full year may differ from these estimates if income (loss) before income taxes is greater than or less than what was estimated or if the allocation of income (loss) to jurisdictions in which it is taxed is different from the estimated allocations. For the three months ended March 31, 2026 and March 31, 2025, the Company recognized net income tax benefit of $ 25,000 and income tax expense of $ 154,000 , respectively. The effective tax rate for the three months ended March 31, 2026 and March 31, 2025 was 25.8 % and 24.6 %. The difference between the Company’s effective tax rate and the U.S. statutory tax rate of 21 % for the three months ended March 31, 2026 was primarily due to state income taxes where the Company operates. The Company did not have any unrecognized tax benefits as of March 31, 2026 or December 31, 2025. The Company files a consolidated U.S. income tax return and tax returns in certain state and local jurisdictions. As of March 31, 2026, the Company is no longer subject to federal examination for years before 2022, or for years before 2021 for state income taxes. However, our tax attribute carryforwards from closed tax years may be subject to examination to the extent utilized in an open tax year. The Company does not expect that our unrecognized tax benefits will change within the next twelve months due to statute of limitation lapses. NOTE 11— SEGMENT REPORTING (a) General Information As of March 31, 2026, the Company operates in three reportable operating segments, each of which is performed through the Company’s OmniMetrix subsidiary: ● Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and Internet of Things (“IoT”) applications for commercial/industrial and residential power generation equipment. In 2025, the Company launched the Omni family of products—the OmniPro commercial monitor and the Omni residential monitor—built on a new proprietary common communications core called the OCOM, a platform designed to enhance connectivity, reliability and performance in remote monitoring systems. These products are replacing the Company’s legacy TrueGuard and AIRGuard product lines, offering enhanced flexibility, expandability, and improved connectivity with easier installation. OmniMetrix also offers the Smart Annunciator product for commercial customers who require a visual representation of generator status via a touchscreen display. ● Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. In 2025, the Company launched the RADex, an OCOM-based expansion of the Company’s RAD™ (Remote AC Mitigation Disconnect) that adds cathodic protection measurements while retaining the ability to remotely disconnect/connect AC mitigation tools on solid-state decouplers, reducing expense and increasing employee safety. ● Infrastructure Solutions (“IS”). OmniMetrix’s IS services provide smart infrastructure monitoring hardware, software and solutions for telecommunications, energy and data center infrastructure asset management in the North American market. Under a Technology Partnership Agreement effective January 1, 2026 with AIO Systems Ltd. (“AIO”), an Israel-based technology company, OmniMetrix has the exclusive right to market, distribute, integrate and sell, on a white-label basis, AIO’s IoT monitoring controllers, sensors, power management devices, security products, environmental monitoring equipment, and a cloud-based Management-of-Management (MOM) platform that provides centralized monitoring, alerting, ticketing and workflow orchestration for telecommunications towers, energy sites and data centers. Revenue in the IS segment is expected to be derived from hardware product sales, recurring monitoring service contracts and other bundled arrangements. The IS segment had no revenue for the three months ended March 31, 2026 as operations were in the pre-revenue stage. 14 The Company’s reportable segments are strategic business units, offering different products and services, and are managed separately as each business requires different technology and marketing strategies. The CODM is the Company’s Chief Executive Officer (CEO). (b) Information about profit or loss and assets The accounting policies of all the segments are those described in the summary of significant accounting policies. The Company evaluates performance by segment based on revenue (driven by the number of connections), gross profit and net income or loss before taxes. The Company does not systematically allocate assets to the divisions of the subsidiaries constituting its consolidated group, unless the division constitutes a significant operation. Accordingly, where a division of a subsidiary constitutes a segment that does not meet the quantitative thresholds of applicable accounting principles, depreciation expense is recorded against the operations of such segment, without allocating the related depreciable assets to that segment. However, where a division of a subsidiary constitutes a segment that does meet the quantitative thresholds, related depreciable assets, along with other identifiable assets, are allocated to such division. Segment expenses that are routinely provided to the CODM are COGS and R&D expense. R&D expense may be allocated to each segment based on the percentage of segment revenue to total revenue or based on estimated time on dedicated projects within the segment. SG&A expense and interest income is allocated to each segment based on the percentage of segment revenue to total revenue instead of being specifically identified to each segment since the Company’s resources have a high level of shared utilization between the segments. Further, the CODM does not review the assets by segment. The following tables represent segmented data for the three-month periods ended March 31, 2026 and 2025 (in thousands): SCHEDULE OF SEGMENTED DATA PG CP IS Total Three months ended March 31, 2026: Revenues from external customers $ 2,083 $ 144 $ — $ 2,227 COGS 402 40 — 442 Segment gross profit 1,681 104 — 1,785 R&D expense 232 23 — 255 SG&A expense 987 98 50 1,135 Segment operating income (loss) 462 ( 17 ) ( 50 ) 395 Interest income, net 28 2 — 30 Segment income (loss) before income taxes $ 490 $ ( 15 ) $ ( 50 ) $ 425 PG CP IS Total Three months ended March 31, 2025: Revenues from external customers $ 2,887 $ 211 $ — $ 3,098 COGS 697 75 — 772 Segment gross profit 2,190 136 — 2,326 R&D expense 271 20 — 291 SG&A expense 954 70 — 1,024 Segment operating income 965 46 — 1,011 Interest income, net 22 1 — 23 Segment income before income taxes $ 987 $ 47 $ — $ 1,034 15 Reconciliation of Segment Net Income to Consolidated Net Income Before Income Taxes SCHEDULE OF RECONCILIATION OF SEGMENT DATA TO CONSOLIDATED STATEMENT OF OPERATIONS 2026 2025 Three months ended March 31, 2026 2025 $ Total net income before income taxes for reportable segments $ 425 $ 1,034 Unallocated cost of corporate headquarters, net of interest income ( 523 ) ( 406 ) Consolidated net (loss) income before income taxes $ ( 98 ) $ 628 NOTE 12— REVENUE Revenue from the prepayment of monitoring fees (generally paid twelve months in advance) are recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period. This method provides a faithful depiction of the transfer of services as it aligns the recognition of revenue with the period in which the monitoring services are provided. By deferring the revenue and recognizing it over the service period, the financial statements accurately reflect the company’s performance and obligations to its customers. The following table disaggregates the Company’s revenue for the three-month periods ended March 31, 2026 and 2025 (in thousands): SCHEDULE OF DISAGGREGATES OF REVENUE Hardware Monitoring Total Three months ended March 31, 2026: PG Segment $ 725 $ 1,358 $ 2,083 CP Segment 85 59 144 Total Revenue $ 810 $ 1,417 $ 2,227 Hardware Monitoring Total Three months ended March 31, 2025: PG Segment $ 1,681 $ 1,206 $ 2,887 CP Segment 148 63 211 Total Revenue $ 1,829 $ 1,269 $ 3,098 The IS segment had no revenue for the three months ended March 31, 2026 as operations were in the pre-revenue stage. Deferred revenue activity for the three-month period ended March 31, 2026 can be seen in the table below (in thousands): SCHEDULE OF DEFERRED REVENUE ACTIVITY Hardware Monitoring Total Balance at December 31, 2025 $ 168 $ 3,241 $ 3,409 Additions during the period — 1,387 1,387 Recognized as revenue ( 110 ) ( 1,417 ) ( 1,527 ) Balance at March 31, 2026 $ 58 $ 3,211 $ 3,269 Amounts to be recognized as revenue in the twelve-month-period ending: March 31, 2027 $ 58 $ 2,876 $ 2,934 March 31, 2028 — 321 321 March 31, 2029 and thereafter — 14 14 Total $ 58 $ 3,211 $ 3,269 16 The amount of hardware revenue recognized during the three-month period ended March 31, 2026 that was included in deferred revenue at the beginning of the fiscal year was $ 110,000 . The amount of monitoring revenue during the three-month period ended March 31, 2026 that was included in deferred revenue at the beginning of the fiscal year was $ 1,255,000 . The following table provides a reconciliation of the Company’s hardware revenue for the three-month periods ended March 31, 2026 and 2025 (in thousands): SCHEDULE OF RECONCILIATION OF HARDWARE REVENUE Reconciliation of Hardware Revenue 2026 2025 Three months ended March 31, Reconciliation of Hardware Revenue 2026 2025 Amortization of deferred revenue $ 110 $ 315 Sales of custom designed units and related accessories 19 58 Hardware sales 556 1,352 Other accessories, services, shipping and miscellaneous charges 125 104 Total hardware revenue $ 810 $ 1,829 Deferred COGS relate only to the sale of equipment. Deferred COGS activity for the three-month period ended March 31, 2026 can be seen in the table below (in thousands): SCHEDULE OF DEFERRED CHARGES ACTIVITY Balance at December 31, 2025 $ 70 Additions, net of adjustments, during the period — Recognized as COGS ( 45 ) Balance at March 31, 2026 $ 25 Amounts to be recognized as COGS in the twelve-month-period ending: March 31, 2027 $ 25 The following table provides a reconciliation of the Company’s COGS expense for the three-month periods ended March 31, 2026 and 2025 (in thousands): SCHEDULE OF RECONCILIATION OF COGS EXPENSES Reconciliation of COGS Expense 2026 2025 Three months ended March 31, Reconciliation of COGS Expense 2026 2025 Amortization of deferred COGS $ 45 $ 135 COGS of custom designed equipment sold with no monitoring 5 16 COGS of hardware sales 245 469 Data costs for monitoring 84 74 Other COGS of accessories, services, shipping and miscellaneous charges 63 78 Total COGS expense $ 442 $ 772 17 The following table provides a reconciliation of the Company’s sales commissions contract assets for the three-month period ended March 31, 2026 (in thousands): SCHEDULE OF SALES COMMISSIONS CONTRACT ASSETS Hardware Monitoring Total Balance at December 31, 2025 $ 16 $ 148 $ 164 Additions during the period — 9 9 Amortization of sales commissions ( 10 ) ( 17 ) ( 27 ) Balance at March 31, 2026 $ 6 $ 140 $ 146 The capitalized sales commissions are included in other current assets ($ 64,000 ) and other assets ($ 82,000 ) in the Company’s unaudited condensed consolidated balance sheet at March 31, 2026. The capitalized sales commissions are included in other current assets ($ 76,000 ) and other assets ($ 88,000 ) in the Company’s condensed consolidated balance sheet at December 31, 2025. Amounts to be recognized as sales commission expense in the twelve-month-period ending (in thousands): SCHEDULE OF SALES COMMISSIONS EXPENSE March 31, 2027 $ 64 March 31, 2028 44 March 31, 2029 and thereafter 38 Total $ 146 NOTE 13— RELATED PARTY BALANCES AND TRANSACTIONS Officer and Director Fees The Company recorded consulting service fees to officers of $ 165,000 and $ 134,000 for the three-month periods ended March 31, 2026 and 2025, respectively, which is included in selling, general and administrative expenses. The Company recorded fees to directors of $ 18,500 for both three-month periods ended March 31, 2026 and 2025, respectively, which is included in selling, general and administrative expenses. NOTE 14— SUBSEQUENT EVENTS On April 1, 2026, 1,412 options, in the aggregate, previously issued to employees and that were set to expire on April 1, 2026 were exercised at an exercise price of $ 5.12 /share. 18 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Form 10-Q contains “forward-looking statements” relating to the Company which represent the Company’s current expectations or beliefs including, but not limited to, statements concerning the Company’s operations, performance, financial condition and growth. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as “may”, “anticipate”, “intend”, “could”, “estimate” or “continue” or the negative or other comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, such as credit losses, dependence on management and key personnel, variability of quarterly results, and the ability of the Company to continue its growth strategy and the Company’s competition, certain of which are beyond the Company’s control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, or any of the other risks set out under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 occur, actual outcomes and results could differ materially from those indicated in the forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All dollar amounts in the tables and discussion below are rounded to the nearest thousand, except per share data; thus, they are approximate. FINANCIAL RESULTS BY COMPANY The following tables show, for the periods indicated, the financial results (dollar amounts in thousands) attributable to each of our consolidated companies. Three months ended March 31, 2026 OmniMetrix Acorn Total Revenue $ 2,227 $ — $ 2,227 Cost of sales 442 — 442 Gross profit 1,785 — 1,785 Gross profit margin 80 % 80 % R&D expense 255 — 255 SG&A expense 1,135 524 1,659 Operating income (loss) $ 395 $ (524 ) $ (129 ) Three months ended March 31, 2025 OmniMetrix Acorn Total Revenue $ 3,098 $ — $ 3,098 Cost of sales 772 — 772 Gross profit 2,326 — 2,326 Gross profit margin 75 % 75 % R&D expense 291 — 291 SG&A expense 1,024 407 1,431 Operating income (loss) $ 1,011 $ (407 ) $ 604 19 BACKLOG As of March 31, 2026, OmniMetrix had a backlog of $3,269,000, comprised of deferred revenue, of which $2,934,000 is expected to be recognized as revenue in the next twelve months. This compares to a backlog of $3,955,000 at March 31, 2025. RECENT DEVELOPMENTS On January 1, 2026, Acorn Energy entered into an agreement with AIO Systems, Ltd. to expand Acorn’s infrastructure asset management technology offerings for cell towers, data centers, and utility assets in North America. Under the agreement, Acorn has exclusive rights to market, distribute, integrate, and sell AIO’s cloud-based monitoring and analytics solutions under the OmniMetrix brand in the United States, Canada, and Mexico, significantly expanding Acorn’s product portfolio and addressable market. The partnership leverages AIO’s globally-deployed technology and provides for shared equipment and monitoring revenues, with Acorn expecting a phased rollout and limited near-term revenue contribution as integration and market expansion efforts progress. OVERVIEW AND TREND INFORMATION Acorn Energy, Inc. (“Acorn” or “the Company”) is a holding company focused on technology-driven solutions for energy infrastructure asset management. We provide the following services and products through our OmniMetrix TM , LLC (“OmniMetrix”) subsidiary: ● Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and Internet of Things (“IoT”) applications for commercial/industrial and residential power generation equipment. In 2025, we launched the Omni family of products—the OmniPro commercial monitor and the Omni residential monitor—built on a new proprietary common communications core called the OCOM, a platform designed to enhance connectivity, reliability and performance in remote monitoring systems. These products are replacing our legacy TrueGuard and AIRGuard product lines, offering enhanced flexibility, expandability, and improved connectivity with easier installation. OmniMetrix also offers the Smart Annunciator product for commercial customers who require a visual representation of generator status via a touchscreen display. ● Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. In 2025, we launched the RADex, an OCOM-based expansion of our RAD™ (Remote AC Mitigation Disconnect) that adds cathodic protection measurements while retaining the ability to remotely disconnect/connect AC mitigation tools on solid-state decouplers, reducing expense and increasing employee safety. ● Infrastructure Solutions (“IS”). OmniMetrix’s IS services provide smart infrastructure monitoring hardware, software and solutions for telecommunications, energy and data center infrastructure asset management in the North American market. Under a Technology Partnership Agreement effective January 1, 2026 with AIO Systems Ltd. (“AIO”), an Israel-based technology company, OmniMetrix has the exclusive right to market, distribute, integrate and sell, on a white-label basis, AIO’s IoT monitoring controllers, sensors, power management devices, security products, environmental monitoring equipment, and a cloud-based Management-of-Management (MOM) platform that provides centralized monitoring, alerting, ticketing and workflow orchestration for telecommunications towers, energy sites and data centers. Revenue in the IS segment is expected to be derived from hardware product sales, recurring monitoring service contracts and other bundled arrangements. The IS segment had no revenue for the three months ended March 31, 2026 as operations were in the pre-revenue stage. Each of our PG, CP and IS activities represents a reportable segment. The following analysis should be read together with the segment and revenue information provided in Notes 11 and 12 to the unaudited condensed consolidated financial statements included in this quarterly report. 20 OmniMetrix OmniMetrix is a Georgia limited liability company based in Buford, Georgia that develops and markets wireless remote monitoring and control systems and services for multiple markets in the IoT ecosystem: critical assets (including stand-by power generators, pumps, pumpjacks, light towers, turbines, compressors, and other industrial equipment) as well as cathodic protection for the pipeline industry (gas utilities and pipeline companies). Acorn owns 99% of OmniMetrix with 1% owned by the former CEO of OmniMetrix. Following the emergence of machine-to-machine (M2M) and IoT applications, whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this economic ecosystem. In addition, OmniMetrix continues to see a rapidly growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including terrorist attacks, natural disasters, cybersecurity threats, and other issues related to the reliability of the electric power grid. As residential and industrial standby generators, turbines, compressors, pumps, pumpjacks, light towers and other industrial equipment are part of the critical infrastructure increasingly monitored in IoT applications and given that OmniMetrix monitors all major brands of critical equipment, OmniMetrix believes it is well-positioned as a competitive participant in this market. OmniMetrix sells monitoring hardware devices and data monitoring services. Revenue from hardware sales is recognized upon shipment or upon acceptance (specific to the Material Contract). Revenues from the payment of monitoring fees (generally paid in advance) are initially recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period (typically twelve-month, renewable periods). Critical Accounting Estimates In preparing the financial statements, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported. These estimates can also affect our supplemental information disclosures, including information about contingencies, risk and financial condition. We believe, given current facts and circumstances, that our estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates and estimates may vary as new facts and circumstances arise. We make routine estimates and judgments in determining net realizable value of accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other reserves as well as the amortization period for deferred commissions payable. Management believes our most critical accounting estimates and assumptions are in the area of valuation allowance. Valuation Allowance We regularly review our deferred tax assets for recoverability considering historically profitability, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. The net carrying amount of the Company’s deferred tax assets is based on the Company’s belief that it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. The ultimate realization of the deferred tax assets depends upon our ability to generate sufficient taxable income in the future. In forecasting future taxable income, management’s projections and beliefs are based upon a variety of estimates and numerous assumptions made by our management with respect to, among other things, interest rates, forecasted revenue of the hardware sales and monitoring revenue or revenue streams that could generate sufficient income. In evaluating our ability to recover our deferred tax assets, we consider and weigh all available positive and negative evidence, including our past operating results, the existence of cumulative losses in the most recent years and our forecast of future taxable income. When the likelihood of the realization of existing deferred tax assets changes, adjustments to the valuation allowance are charged in the period in which the determination is made. If our estimates and assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets, resulting in additional income tax expense in the Company’s Consolidated Statements of Operations, or conversely to reduce the existing valuation allowance resulting in less income tax expense. 21 The Company currently has a three-year cumulative income position which is positive evidence that it is more likely than not the deferred tax assets will be realized. As of March 31, 2026, we believe, based on our projections, that a partial valuation allowance of $10,326,000, continues to be necessary against our deferred tax assets. Uncertainty exists related to the generation of future hardware and monitoring revenue, nonetheless the Company believes sufficient positive evidence exists which supports the partial reversal of the valuation allowance. At this time, however, we cannot assure you that we will be successful in doing so. Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when appropriate. Future changes in the Company’s stock ownership, which may be outside of the Company’s control or future equity offerings or acquisitions that have equity as a component of the purchase price consideration may trigger an “ownership change” and the utilization of the Company’s federal and state net operating losses may be subject to a limitation under the Internal Revenue Code, as well as similar state provisions. Such limitations may result in the expiration of net operating loss (NOL) carryforwards before their utilization. Results of Operations The following table sets forth certain information with respect to the unaudited condensed consolidated results of operations of the Company for the three-month periods ended March 31, 2026 and March 31, 2025, including the percentage of total revenues during each period attributable to selected components of the operations statement data and for the period-to-period percentage changes in such components. For segment data, see Notes 11 and 12 to the unaudited condensed consolidated financial statements included in this quarterly report. Three months ended March 31, 2026 2025 Change ($000) % of revenues ($000) % of revenues from 2025 to 2026 Revenue $ 2,227 100 % $ 3,098 100 % (28 )% Cost of sales 442 20 % 772 25 % (43 )% Gross profit 1,785 80 % 2,326 75 % (23 )% R&D expenses 255 11 % 291 9 % (12 )% SG&A expenses 1,659 74 % 1,431 46 % 16 % Operating (loss) income (129 ) (6 )% 604 19 % (121 )% Interest income, net 31 1 % 24 1 % 29 % (Loss) income before income taxes (98 ) (4 )% 628 20 % (115 )% Income tax (benefit) expense (25 ) (1 )% 154 5 % (116 )% Net (loss) income (73 ) (3 )% 474 15 % (115 )% Non-controlling interests share of net income (4 ) (* )% (10 ) (* )% (60 )% Net (loss) income attributable to Acorn Energy, Inc. $ (77 ) (3 )% $ 464 15 % (117 )% *result is less than 1% Revenue . Revenue in the first quarter of 2026 was $2,227,000 compared to $3,098,000 in the first quarter of 2025, which is a decrease of $871,000, or 28.1%. As discussed above, OmniMetrix has two reportable segments, PG and CP, that generated revenue in the three month periods ended March 31, 2026 and 2025. The PG segment includes our monitoring devices for generators, industrial air compressors and our annunciator products. The CP segment includes our monitoring devices for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. Of the $2,227,000 in revenue recognized in the three-month period ended March 31, 2026, $2,083,000 was attributed to PG activities and $144,000 was attributed to CP activities. As compared to the three-month period ended March 31, 2025, revenue from PG activities decreased $804,000, or 27.8%, and revenue from CP activities decreased $67,000, or 31.8%. As compared to the three-month period ended March 31, 2025, hardware revenue decreased $1,019,000, or 55.7%, while monitoring revenue increased $148,000, or 11.7%. 22 Hardware revenue during the three-month periods ended March 31, 2026 and 2025 is further detailed in the table below (in thousands): Three months ended March 31, Reconciliation of Hardware Revenue 2026 2025 Amortization of deferred revenue $ 110 $ 315 Sales of custom designed units and related accessories 19 58 Hardware sales 556 1,352 Other accessories, services, shipping and miscellaneous charges 125 104 Total hardware revenue $ 810 $ 1,829 PG hardware revenue decreased $956,000, or 56.9% during the first three-month period ended March 31, 2026 to $725,000, as compared to $1,681,000 during the first three-month period ended March 31, 2025. The decrease in PG revenue was primarily due to the sales under our material contract in the prior year period and the decrease in revenue recognized from amortization of deferred hardware, as we near the final recognition of the remaining balance of revenue that was previously deferred. PG monitoring revenue increased $152,000, or 12.6%, due to an increase in the number of connections being monitored and growth in our customer base. Gross Profit . Gross profit during the three-month period ended March 31, 2026 was $1,785,000, reflecting a gross margin of 80.2% on revenue, compared with a gross profit during the three-month period ended March 31, 2025 of $2,326,000, reflecting a gross margin of 75.1%. The gross margin increased to 80.2% in the first quarter of 2026 due to higher monitoring revenue, which has a 94.1% gross margin, as a result of more connections. R&D expense . During the three-month periods ended March 31, 2026 and 2025, R&D expense was $255,000 and $291,000, respectively. The decrease in R&D expense in the three-month period ended March 31, 2026 of approximately $36,000 is related to a decrease in expenses and materials paid to third-party consultants offset by salary increases granted to our engineering personnel effective January 1, 2026. Selling, general and administrative expense. SG&A expense of the consolidated entities in the first three months of 2026 reflected an increase of $228,000, or 15.9%, as compared to the first three months of 2025. OmniMetrix’s SG&A expense increased $111,000, or 10.8%, from $1,024,000 in the first three months of 2025 to $1,135,000 in the first three months of 2026. This increase was primarily due to an increase of (i) $25,000 in personnel expenses due to compensation increases and staff additions, (ii) $43,000 in technology expenses, primarily consulting fees for staff augmentation and special projects, (iii) $27,000 in travel and trade show expenses, (iv) $26,000 in facility expenses, and an increase of (iv) $6,000 in other expenses in the aggregate offset by a decrease of (v) $16,000 in commission expenses. Corporate SG&A expense increased $117,000, or 28.7%, from $407,000 in the first three months of 2025 to $524,000 in the first three months of 2026. This increase was due to an increase of $136,000 in stock compensation expense due to a higher number of options being issued to our officers and directors in January 2026 than in historical periods and the higher stock price and related volatility offset by a net decrease of $19,000 in other public company expenses in the aggregate. Net (loss) income attributable to Acorn Energy . We recognized a net loss attributable to Acorn stockholders of $77,000 in the first three months of 2026 compared to net income attributable to Acorn stockholders of $464,000 in the first three months of 2025. Our net income during the three-month period ended March 31, 2026 is comprised of pre-tax net income at OmniMetrix of $426,000 plus a tax benefit of $25,000, corporate expenses, net of interest income, of $524,000, and $4,000 representing the non-controlling interest share of our income from OmniMetrix. Our net income during the three-month period ended March 31, 2025 is comprised of pre-tax net income at OmniMetrix of $1,034,000 less federal and state taxes of $154,000, in the aggregate, corporate expenses, net of interest income, of $406,000, and $10,000 representing the non-controlling interest share of our income from OmniMetrix. 23 Liquidity and Capital Resources At March 31, 2026, we had working capital of $3,115,000. Our working capital includes $4,257,000 of cash and deferred revenue of $2,934,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized. Liquidity The Company expects that its existing cash as of March 31, 2026 of $4,257,000 will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of these financial statements. Contractual Obligations and Commitments The table below provides information concerning obligations under certain categories of our contractual obligations as of March 31, 2026. CASH PAYMENTS DUE TO CONTRACTUAL OBLIGATIONS Twelve-month Periods Ending March 31, (in thousands) Total 2027 2028-2029 2030-2031 Operating leases* $ 1,151 $ 218 $ 493 $ 440 Software agreements 16 16 — — Contractual services 220 220 — — Purchase obligations** 367 367 — — Total contractual cash obligations $ 1,754 $ 821 $ 493 $ 440 *Reflects the gross amount of the operating lease liabilities. Imputed interest is $150,000 resulting in $163,000 included in current liabilities. Does not include rent amounts to be received under the sublease. **Reflects open purchase orders for components/parts to be delivered over the next twelve months as sales forecast requires. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2026. As noted in our Annual Report on Form 10-K for the year ended December 31, 2025, we employ a decentralized internal control methodology, coupled with management’s oversight, whereby our subsidiary is responsible for mitigating its risks to financial reporting by implementing and maintaining effective control policies and procedures and subsequently translating that respective risk mitigation up and through to the parent level and to the Company’s external consolidated financial statements. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 24 PART II ITEM 5. OTHER INFORMATION During the first quarter of fiscal year 2026, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408. ITEM 6. EXHIBITS 3.1 Amended and Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed on November 9, 2023). 3.2 Amended By laws of the Registrant (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed on November 9, 2023). 4.1 Description of the Registrant’s common stock (incorporated herein by reference to Exhibit 4.1 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2025, filed on March 5, 2026) . 4.2 Amended and Restated Articles of Incorporation of OMX Holdings, Inc. (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016) 10.1* Consulting Agreement, dated January 19, 2026, by and between the Registrant and Jan H. Loeb (incorporated herein by reference to Exhibit 10.6 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2025, filed on March 5, 2026) . 10.2* Amended and Restated Consulting Agreement, dated January 19, 2026, by and between the Registrant and Tracy Clifford Consulting, LLC (incorporated herein by reference to Exhibit 10.7 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2025, filed on March 5, 2026) . 10.3* Form of Option Award Agreement for 2026 CEO/CFO option grants under the Registrant’s Amended and Restated 2006 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.8 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2025, filed on March 5, 2026) . #31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. #31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. #32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. #32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. #101.1 The following financial statements from Acorn Energy’s Form 10-Q for the quarter ended March 31, 2026, filed on May 7, 2026, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Changes in Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text. #104.1 Cover Page Interactive Data File (embedded within the Inline XBRL document) * This exhibit includes a management contract, compensatory plan or arrangement in which one or more directors or executive officers of the Registrant participate. # This exhibit is filed or furnished herewith. 25 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by its principal financial officer thereunto duly authorized. ACORN ENERGY, INC. Dated: May 7, 2026 By: /s/ TRACY S. CLIFFORD Tracy S. Clifford Chief Financial Officer 26