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Segment Reporting

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Reporting

NOTE 8—SEGMENT REPORTING

The Company currently operates in two reportable operating segments, both of which are performed though the Company’s OmniMetrix subsidiary:

	●	Power Generation (“PG”) monitoring (formerly known as Machine-to-Machine Critical Asset Monitoring & Control). The PG segment provides wireless remote monitoring and control systems and services for critical assets as well as Internet of Things applications.

	●	Corrosion Protection (“CP”) monitoring. The CP segment provides for remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies.

In addition, up to the closing of the DSIT Transaction (see Note 3), the Company reported its activities in the Energy & Security Sonar Solutions segment. This segment, whose activities were performed by DSIT, provided sonar and acoustic related solutions for energy, defense and commercial markets with a focus on underwater site security for strategic energy installations and other advanced acoustic systems and real-time embedded hardware and software development and production. “Other” operations include certain IT activities (protocol management software for cancer patients and billing software) and outsourced consulting activities performed by the Company’s DSIT subsidiary that did not meet the quantitative thresholds under applicable accounting principles.

Following the closing of the DSIT Transaction, the Company is no longer consolidating the results of DSIT, but rather is reporting on its investment in DSIT on the equity method. Accordingly, effective April 21, 2016, the Company no longer consolidates the results of DSIT’s Energy & Security Sonar Solutions segment or the activities of its “Other” segment.

The following tables represent segmented data for the three months ended March 31, 2017 and March 31, 2016:

		PG				CP				Energy & Security Sonar Systems*				Other*				Total
Three months ended March 31, 2017:
Revenues from external customers		$	898			$	198			$	—			$	—			$	1,096
Intersegment revenues			—				—				—				—				—
Segment gross profit			520				94				—				—				614
Depreciation and amortization			16				4				—				—				20
Segment loss before income taxes			(145	)			(64	)			—				—				(209	)

Three months ended March 31, 2016:
Revenues from external customers		$	667			$	174			$	3,582			$	338			$	4,761
Intersegment revenues			—				—				—				—				—
Segment gross profit			333				92				1,133				73				1,631
Depreciation and amortization			16				4				43				8				71
Segment income (loss) before income taxes			(239	)			(13	)			67				(13	)			(198	)

* Acorn ceased consolidating the results of DSIT following the close of the sale of a portion of Acorn’s interest in DSIT on April 21, 2016. Accordingly, there are no results for the period ending March 31, 2017.

Reconciliation of Segment Loss to Consolidated Net Loss Before Income Taxes

		Three months ended March 31,
		2017				2016

Total net loss before income taxes for reportable segments		$	(209	)		$	(185	)
Other operational segment net income (loss) before income taxes			—				(13	)
Total segment net loss before income taxes			(209	)			(198	)
Unallocated cost of corporate headquarters*			(162	)			(1,419	)
Unallocated benefit (cost) of DSIT headquarters			—				(15	)
Consolidated loss before income taxes		$	(371	)		$	(1,632	)

* Includes stock compensation expense of $13 and $220 for the three month periods ended March 31, 2017 and March 31, 2016, respectively. The three month period ended March 31, 2016 also includes $460 of salary and associated costs and medical insurance associated with the resignation of Mr. Moore and $250 of interest expense to Leap Tide and directors.