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Segment Reporting

6 Months Ended

Jun. 30, 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 six and three months period ended June 30, 2017 and June 30, 2016:

		PG				CP				Energy & Security Sonar Systems*				Other*				Total
Six months ended June 30, 2017:
Revenues from external customers		$	1,712			$	429			$	—			$	—			$	2,141
Intersegment revenues			—				—				—				—				—
Segment gross profit			1,018				190				—				—				1,208
Depreciation and amortization			32				8				—				—				40
Segment loss before income taxes			(274	)			(149	)			—				—				(423	)

Six months ended June 30, 2016:
Revenues from external customers		$	1,263			$	339			$	4,620			$	454			$	6,676
Intersegment revenues			—				—				—				—				—
Segment gross profit			585				197				1,517				114				2,413
Depreciation and amortization			32				8				53				10				103
Segment income (loss) before income taxes			(712	)			(61	)			82				(10	)			(701	)

Three months ended June 30, 2017:
Revenues from external customers		$	814			$	231			$	—			$	—			$	1,045
Intersegment revenues			—				—				—				—				—
Segment gross profit			498				96				—				—				594
Depreciation and amortization			16				4				—				—				20
Segment loss before income taxes			(129	)			(85	)			—				—				(214	)

Three months ended June 30, 2016:
Revenues from external customers		$	596			$	165			$	1,038			$	116			$	1,915
Intersegment revenues			—				—				—				—				—
Segment gross profit			252				105				384				41				782
Depreciation and amortization			16				4				10				2				32
Segment income (loss) before income taxes			(473	)			(48	)			15				3				(503	)

* 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 periods ending June 30, 2017.

Reconciliation of Segment Loss to Consolidated Net Loss Before Income Taxes

		Six months ended June 30,								Three months ended June 30,
		2017				2016				2017				2016
Total net loss before income taxes for reportable segments		$	(423	)		$	(691	)		$	(214	)		$	(506	)
Other operational segment net income (loss) before income taxes			—				(10	)			—				3
Total segment net loss before income taxes			(423	)			(701	)			(214	)			(503	)
Unallocated cost of corporate headquarters*			(507	)			(1,983	)			(345	)			(564	)
Unallocated benefit of DSIT headquarters			—				61				—				76
Consolidated loss before income taxes			(930	)		$	(2,623	)			(559	)		$	(991	)

* Includes stock compensation expense of $18 and $234 for the six month periods ended June 30, 2017 and 2016, respectively, and $5 and $14 for the three month periods ended June 30, 2017 and 2016, respectively. The six month period ended June 30, 2016 also includes $460 of salary and associated costs and medical insurance associated with the resignation of Mr. Moore and $502 of interest expense to Leap Tide and directors ($41 of interest with respect to directors in the six months ended June 30, 2017). The three month period ended June 30, 2016 includes $252 of interest expense to Leap Tide and directors ($28 with respect to directors in the three months ended June 30, 2017).