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ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Use of Estimates in Preparation of Financial Statements

Use of Estimates in Preparation of Financial Statements

The preparation of unaudited condensed 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 unaudited condensed unaudited consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods.

As applicable to these unaudited condensed consolidated financial statements, the most significant estimates and assumptions relate to uncertainties with respect to income taxes, inventories, account receivable allowances, contingencies, revenue recognition, management’s projections and analyses of the possible impairments.

Concentrations of Credit Risk

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 approximately $1,784,000 at March 31, 2022. The Company does not believe there is significant risk of non-performance by these counterparties. For the three-month period ended March 31, 2022, there were no customers that represented greater than 10% of the Company’s total invoiced sales. For the three months ended March 31, 2021, one customer represented approximately 11% of total invoiced sales. Approximately 10% of the accounts receivable at March 31, 2022 was due from one customer who pays its receivables over usual credit periods. As of May 11, 2022, we have collected the full outstanding amount of the approximately $84,000  due from this customer as of March 31, 2022. 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.

Basic and Diluted Net (Loss) Income Per Share

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 year, 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 and warrants are excluded from the computation of diluted net loss per share if doing so would be antidilutive. The weighted average number of options and warrants that were excluded from the computation of diluted net loss per share, as they had an antidilutive effect, was approximately 929,000 (which have a weighted average exercise price of $0.41) and approximately 35,000 (which have a weighted average exercise price of $0.13), respectively, for the three-month period ending March 31, 2022. The weighted average number of options and warrants, in the aggregate, that were excluded from the computation of diluted net loss per share, as they had an antidilutive effect, was approximately 964,000 (which have a weighted average exercise price of $0.40) and approximately 245,000 (which have a weighted average exercise price of $0.99) for the three-month periods ending March 31, 2022 and 2021, respectively.

The following data represents the amounts used in computing EPS and the effect on net income (loss) and the weighted average number of shares of dilutive potential common stock (in thousands):

SCHEDULE OF EFFECT ON NET INCOME LOSS AND WEIGHTED AVERAGE NUMBER OF SHARES 

		2022				2021
		Three months ended March 31,
		2022				2021
Net (loss) income available to common stockholders		$	(123	)		$	20
Weighted average shares outstanding:
-Basic			39,688				39,688
Add: Warrants			—				26
Add: Stock options			—				147
-Diluted			39,688				39,861
Basic and diluted net (loss) income per share		$	0.00			$	0.00

Recently Issued Accounting Principles

Recently Issued Accounting Principles

Other than the pronouncement noted below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three-month period ended March 31, 2022, that are of material significance, or have potential material significance, to the Company.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on its unaudited condensed consolidated financial statements and related disclosures.

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Disclosure of accounting policy for credit risk.

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