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Nature of Operations

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

NOTE 1—NATURE OF OPERATIONS

(a) Description of Business

Acorn Energy, Inc. (“Acorn” or “the Company”) is a Delaware corporation which is holding company focused on technology-driven solutions for energy infrastructure asset management. Following the sale of its remaining interests in DSIT Solutions Ltd. (“DSIT”) in February 2018 (the 2018 DSIT Transaction) (see below and Note 21 – Subsequent Events), the Company provides the following services and products through its OmniMetrix^TM, LLC (“OmniMetrix”) subsidiary:

	●	Power Generation (“PG”) monitoring. OmniMetrix’s PG activities provide wireless remote monitoring and control systems and services for critical assets as well as Internet of Things applications.

	●	Cathodic Protection (“CP”) monitoring. OmniMetrix’s CP activities provide for remote monitoring of cathodic protection systems on gas pipelines for gas utilities and pipeline companies.

On April 21, 2016, the Company closed on a transaction for the sale of a portion of its interests in DSIT Solutions, Ltd. (the “2016 DSIT Transaction” - see Note 3). As a result of the transaction, the Company’s holdings in DSIT were reduced from 78.7% (on a fully diluted basis) to 41.2% and, subsequent to the 2016 DSIT Transaction, the Company had limited representation on the DSIT Board of directors. Accordingly, following the sale, the Company no longer consolidates the assets, liabilities or results of DSIT. Operating results for DSIT through April 21, 2016 are consolidated in continuing operations while the Company’s share of DSIT’s results for the period from April 22, 2016 to December 31, 2016 are included in the Company’s Consolidated Statements of Operations in the line “Share of income in DSIT” under the equity method of accounting.

On January 18, 2018, the Company entered into a Share Purchase Agreement for the sale of its remaining interest in DSIT to an Israeli investor group. Following the closing of the transaction on February 14, 2018, the Company will no longer report DSIT’s results on the equity method. See Note 21 – Subsequent Events.

The Company’s operations are based in the United States and in Israel through its investment in DSIT until the closing of the 2018 DSIT Transaction. Acorn’s shares are traded on the OTCQB marketplace under the symbol ACFN.

See Note 19 for segment information and major customers.

(b) Liquidity

As of December 31, 2017, the Company had approximately $450 of corporate cash and cash equivalents. In February 2018, the Company sold its remaining interest in DSIT for $5,800 (see Note 20 – Subsequent Events) and received cash proceeds of approximately $4,200 (net of $1,600 of the balance due to DSIT which was assigned to the purchasers) which was used to pay transaction costs, withholding taxes, repay director loans and accrued interest and other liabilities. As of March 16, 2018, the Company had corporate cash of approximately $2,367. Such cash plus the cash generated from operations and borrowing from the OmniMetrix Loan and Security Agreement, will provide sufficient liquidity to finance the operating activities of Acorn and OmniMetrix at their current level of operations for the foreseeable future and for the twelve months from the issuance of these financial statements in particular.

(c) Accounting Principles

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

(d) 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 financial statements, and the reported amounts of revenues and expenses during the reporting periods.

As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to income taxes, inventories, account receivable allowances, contingencies and analyses of the possible impairments.

(e) Amounts in the footnotes in the Financial Statements

All dollar amounts in the footnotes of the consolidated financial statements are in thousands except for per share data.