EX-99.1 2 v086506_ex99-1.htm Unassociated Document
Exhibit 99.1

ACORN FACTOR, INC. ANNOUNCES 2007 SECOND QUARTER
RESULTS AND HIGHLIGHTS


MAHWAH, NJ, - AUGUST 23, 2007-- ACORN FACTOR, INC. (OTCBB: ACFN) today announced that it has filed with the Securities Exchange Commission its quarterly report on Form 10-Q for the quarter ended June 2007. The Form 10-Q filed on August 20, 2007 provides full disclosure and an analysis of the results of operations for the period.

Highlights during and following the quarter include:

·  
Comverge completed its IPO, with Acorn continuing to be Comverge’s single largest shareholder.
 
·  
In July, Comverge announced the acquisition of EnerWise Global Technologies, dramatically expanding Comverge’s commercial and industrial solution offering, creating the largest demand response provider in North America with over 1,400 megawatts of managed capacity.
 
·  
Comverge was named by Sustainable Business to the “SB20: World’s Top Sustainable Stocks” of 2007.
 
·  
Acorn’s dsIT Solutions subsidiary announced the receipt of a multi-million dollar order from Israel’s Ministry of Defense for a state-of-the art sonar and acoustical product.
 
·  
Acorn’s dsIT Solutions subsidiary announced the world’s first underwater surveillance system to protect a strategic coastal energy installation.
 
·  
Paketeria GmbH was named second most promising new German franchise system by Impulse, one of Germany’s leading business magazines.
 
·  
In July, Acorn purchased a 10% percent interest (with an option to increase to 51%) in Local Power, Inc. the creator of community choice aggregation, a revolution in renewable power and retail markets for electricity.

“We are proud of the success of Comverge’s IPO which now has a market capitalization of over $500 million. Comverge is now the leading demand response provider to the US electrical grid.” commented John A. Moore, President and CEO of Acorn.

“In creating and growing Comverge, we at Acorn have earned the right to call ourselves leaders in funding and accelerating emerging energy ventures. We agree with the many leading minds in both energy and finance that solving the growing energy and climate challenges is the greatest opportunity of the 21st century.

“As a result of the Comverge IPO, Acorn now has the resources, network of relationships and experience to fund and accelerate the growth of other emerging energy ventures. Our future is exciting.”

Following the Comverge IPO in April 2007, Acorn continues to be Comverge’s largest shareholder with 2,786,000 shares, currently about 14% of Comverge’s outstanding shares. Following the public offering, Acorn wrote up its investment in Comverge to reflect the excess of the IPO price over the carrying value per share of the Comverge shares on Acorn’s books. This resulted in a non-cash gain reflected on the statement of operations for the quarter of $16.2 million. In addition, as of June 30, 2007 the Company “marked-to-market” the approximately 20% of its Comverge shares deemed to be unrestricted and “available for sale” under applicable accounting standards at that date, resulting in an increase in the carrying value of its investment in Comverge to $28.3 million. It is expected that by the end of the third quarter of 2007, and in all future periods, the Company’s entire investment in Comverge stock will be considered available for sale and will be reflected on the Company’s balance sheet at its then fair market value.

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About Acorn Factor, Inc.

Acorn Factor specializes in funding and accelerating the growth of emerging ventures that promise meaningful improvements in the economic and environmental efficiency of the energy sector.

Acorn Factor aims to take primarily-controlling positions in promising companies led by great entrepreneurs and to add value by helping these companies with branding, positioning, strategy, and business development guidance. Acorn Factor is a global company with equity interests currently in four promising businesses: Comverge (14%-held), a leading clean energy provider and Red Herring 100 Company; Paketeria GmbH a leading green logistics company; dsIT (58%-held) is a leader in underwater security systems for strategic coastal energy infrastructure; and Local Power, Inc. (10%-held), the creator of community choice aggregation, a revolution in renewable power and retail markets for electricity. Additional information about Acorn Factor and its subsidiary and affiliates is available at www.acornfactor.com, www.comverge.com, www.paketeria.de, www.dsit.co.il, and www.localpower.com.

Certain statements made above are forward-looking in nature. Whether such statements ultimately prove to be accurate depends upon a variety of factors that may affect the Company’s business and operations. Many of these factors are described in the Company’s most recent Annual Report on Form 10-K as filed with Securities and Exchange Commission.

Contact: John A. Moore, CEO
jmoore@acornfactor.com
(302) 656-1707

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ACORN FACTOR, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share data)

ASSETS
  
As of
December 31, 2006
  
As of
June 30, 2007
  
       
(unaudited)
  
Current assets:
          
Cash and cash equivalents
  
$
1,521
  
$
5,127
  
Accounts receivable, net
    
1,373
    
830
  
Unbilled work-in-process
    
393
    
494
  
Other current assets
    
316
    
1,686
  
Total current assets
    
3,603
    
8,137
  
Property and equipment, net
    
445
    
551
  
Investment in Comverge
    
--
    
28,387
  
Investment in Paketeria
    
1,212
    
875
  
Funds in respect of employee termination benefits
    
1,568
    
1,360
  
Goodwill
    
97
    
95
  
Other intangible assets, net
    
48
    
9
  
Other assets
    
285
    
170
  
Total assets
  
$
7,258
  
$
39,584
  
LIABILITIES AND SHAREHOLDERS’ EQUITY
              
Current liabilities:
              
Short-term bank credit
 
$
462
  
$
166
  
Current maturities of long-term debt
    
26
    
71
  
Note payable - related party
    
300
    
--
  
Trade accounts payable
    
378
    
430
  
Accrued payroll, payroll taxes and social benefits
    
478
    
863
  
Other current liabilities
    
1,700
    
2,125
  
Total current liabilities
    
3,344
    
3,655
  
Long-term liabilities:
              
Investment in Comverge, net
    
1,824
    
--
  
Convertible debt, net of discounts
    
--
    
4,470
  
Liability for employee termination benefits
    
2,545
    
1,968
  
Other liabilities
    
6
    
3
  
Total long-term liabilities
    
4,375
    
6,441
  
Shareholders’ equity:
              
Common stock - $0.01 par value per share:
              
Authorized - 20,000,000 shares; Issued -10,276,030 shares and 10,451,905 at December 31, 2006 and June 30, 2007
    
102
    
104
  
Additional paid-in capital
    
43,987
    
47,535
  
Warrants
    
888
    
1,629
  
Accumulated deficit
    
(41,904
)
  
(30,295
)
Treasury stock, at cost - 777,371 shares for December 31, 2006 and June 30, 2007, respectively
    
(3,592
)
  
(3,592
)
Accumulated other comprehensive income
    
58
    
14,107
  
Total shareholders’ equity (deficit)
    
(461
)
  
29,488
  
Total liabilities and shareholders’ equity
  
$
7,258
  
$
39,584
  

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ACORN FACTOR, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
 
   
Six months ended
June 30,
  
Three months ended
June 30,
  
   
2006
  
2007
  
2006
  
2007
  
Sales:
                  
Projects 
  
$
1,521
    
1,287
  
$
791
  
$
475
  
Services 
    
434
    
403
    
197
    
197
  
Other 
    
8
    
30
    
2
    
9
  
Total sales
    
1,963
    
1,720
    
990
    
681
  
Cost of sales:
                          
Projects 
    
1,021
    
1,042
    
482
    
461
  
Services 
    
369
    
337
    
163
    
164
  
Other 
    
--
    
--
    
--
    
--
  
Total cost of sales
    
1,390
    
1,379
    
645
    
625
  
Gross profit 
    
573
    
341
    
345
    
56
  
Operating expenses:
                          
Research and development expenses 
    
97
    
233
    
71
    
103
  
Selling, marketing, general and administrative expenses 
    
1,966
    
1,859
    
1,044
    
1,049
  
Total operating expenses
    
2,063
    
2,092
    
1,115
    
1,152
  
Operating loss 
    
(1,490
)
  
(1,751
)
  
(770
)
  
(1,096
)
Finance expense, net 
    
(6
)
  
(2,111
)
  
(20
)
  
(1,258
)
Gain on public offering of Comverge 
    
--
    
16,169
    
--
    
16,169
  
Other income, net 
    
330
    
--
    
--
    
--
  
Income (loss) before taxes on income  
    
(1,166
)
  
12,307
    
(790
)
  
13,815
  
Taxes on income 
    
(6
)
  
(5
)
  
(4
)
  
(3
)
Income (loss) from operations of the Company and its consolidated subsidiaries 
    
(1,172
)
  
12,302
    
(794
)
  
13,812
  
Share of losses in Comverge 
    
(210
)
  
--
    
--
    
--
  
Share of losses in Paketeria 
    
--
    
(388
)
  
--
    
(201
)
Net income (loss) from continuing operations
    
(1,382
)
  
11,914
    
(794
)
  
13,611
  
Net income from discontinued operations, net of tax 
    
78
    
--
    
--
    
--
  
Loss on sale of discontinued operations and contract settlement, net of tax
    
(2,298
)
  
--
    
--
    
--
  
Net income (loss) 
  
$
(3,602
)
$
11,914
  
$
(794
)
$
13,611
  
Basic net income (loss) per share:
                          
Income (loss) per share from continuing operations 
  
$
(0.17
)
$
1.25
  
$
(0.10
)
$
1.42
  
Discontinued operations 
    
(0.27
)
  
--
    
--
    
--
  
Net income (loss) per share - basic 
  
$
(0.44
)
$
1.25
  
$
(0.10
)
$
1.42
  
Diluted net income (loss) per share:
                          
Income (loss) per share from continuing operations 
  
$
(0.17
)
$
1.05
  
$
(0.10
)
$
1.11
  
Discontinued operations 
    
(0.27
)
  
--
    
--
    
--
  
Net income (loss) per share -diluted 
  
$
(0.44
)
$
1.05
  
$
(0.10
)
$
1.11
  
Weighted average number of shares outstanding -
                          
Basic 
    
8,152
    
9,549
    
8,161
    
9,583
  
Diluted 
    
8,152
    
11,560
    
8,161
    
12,463
  

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