Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 22, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | ACORN ENERGY, INC. | ||
Entity Central Index Key | 880,984 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 5,300 | ||
Entity Common Stock, Shares Outstanding | 29,367,019 | ||
Trading Symbol | ACFN | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 222 | $ 124 |
Restricted deposits | 2,172 | |
Escrow deposit | 579 | 100 |
Accounts receivable, net | 1,005 | 6,389 |
Unbilled revenue | 3,849 | |
Inventory, net | 202 | 506 |
Other current assets | 932 | 1,633 |
Investment in DSIT | 5,658 | |
Current assets - discontinued operations | 119 | 1,079 |
Total current assets | 8,717 | 15,852 |
Property and equipment, net | 214 | 954 |
Severance assets | 3,558 | |
Restricted deposits | 2,951 | |
Goodwill | 516 | |
Other assets | 309 | 470 |
Non-current assets - discontinued operations | 29 | |
Total assets | 9,240 | 24,330 |
Current liabilities: | ||
Short-term bank credit and current maturities of long-term debt | 376 | 1,916 |
Leap Tide loan payable, net of discount | 1,900 | |
Accounts payable | 708 | 2,346 |
Accrued payroll, payroll taxes and social benefits | 327 | 1,320 |
Deferred revenue | 2,149 | 5,251 |
Other current liabilities | 629 | 2,260 |
Current liabilities - discontinued operations | 997 | 1,827 |
Total current liabilities | 5,186 | 16,820 |
Long-term liabilities: | ||
Accrued severance | 4,984 | |
Other long-term liabilities | 831 | 849 |
Due to Acorn director | 165 | |
Due to DSIT | 1,171 | |
Non-current liabilities - discontinued operations | 19 | |
Total long-term liabilities | 2,167 | 5,852 |
Commitments and contingencies (Note 15) | ||
Equity: | ||
Acorn Energy, Inc. shareholders Common stock - $0.01 par value per share: Authorized - 42,000,000 shares; Issued - 30,124,494 and 28,127,511 shares at December 31, 2016 and 2015, respectively | 301 | 281 |
Additional paid-in capital | 99,917 | 98,977 |
Warrants | 1,600 | 1,597 |
Accumulated deficit | (97,196) | (97,191) |
Treasury stock, at cost - 801,920 shares at December 31, 2016 and 2015 | (3,036) | (3,036) |
Accumulated other comprehensive loss | (254) | (262) |
Total Acorn Energy, Inc. shareholders' equity | 1,332 | 366 |
Non-controlling interests | 555 | 1,292 |
Total equity | 1,887 | 1,658 |
Total liabilities and equity | $ 9,240 | $ 24,330 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 42,000,000 | 42,000,000 |
Common stock, shares issued | 30,124,494 | 28,127,511 |
Treasury stock, shares | 801,920 | 801,920 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Revenue | $ 8,659 | $ 16,548 |
Cost of sales | 5,134 | 10,381 |
Gross profit | 3,525 | 6,167 |
Operating expenses: | ||
Research and development expenses, net | 927 | 1,705 |
Selling, general and administrative expenses | 5,651 | 9,632 |
Total operating expenses | 6,578 | 11,337 |
Operating loss | (3,053) | (5,170) |
Finance expense, net | (572) | (327) |
Gain on sale of interest in DSIT, net of transaction costs | 3,543 | |
Loss before income taxes | (82) | (5,497) |
Income tax expense | (19) | (209) |
Net loss after income taxes | (101) | (5,706) |
Share of income in DSIT | 268 | |
Income (loss) before discontinued operations | 167 | (5,706) |
Loss from discontinued operations, net of income taxes | (286) | (5,096) |
Net loss | (119) | (10,802) |
Non-controlling interest share of loss - continuing operations | 264 | 105 |
Non-controlling interest share of loss - discontinued operations | 98 | |
Net loss attributable to Acorn Energy, Inc. shareholders. | $ 145 | $ (10,599) |
Basic and diluted net income (loss) per share attributable to Acorn Energy, Inc. shareholders: | ||
From continuing operations | $ 0.02 | $ (0.21) |
From discontinued operations | (0.01) | (0.19) |
Net loss per share attributable to Acorn Energy, Inc. shareholders | $ 0.01 | $ (0.40) |
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders - basic | 28,488,000 | 26,803,000 |
Weighted average number of shares outstanding attributable to Acorn Energy, Inc. shareholders - diluted | 28,531,000 | 26,803,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements Of Comprehensive Income Loss | ||
Net loss attributable to Acorn Energy, Inc. shareholders | $ 145 | $ (10,599) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 6 | (36) |
Comprehensive income (loss) | 151 | (10,635) |
Other comprehensive income (loss) attributable to non-controlling interests | 2 | (14) |
Comprehensive income (loss) attributable to Acorn Energy, Inc. shareholders | $ 153 | $ (10,649) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Warrants [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Acorn Energy, Inc. Shareholders' Equity [Member] | Non-Controlling Interests [Member] | Total |
Balances at Dec. 31, 2014 | $ 272 | $ 97,607 | $ 1,641 | $ (86,592) | $ (3,036) | $ (212) | $ 9,680 | $ (3,287) | $ 6,393 |
Balances, shares at Dec. 31, 2014 | 27,278,000 | ||||||||
Net loss | (10,599) | (10,599) | (203) | (10,802) | |||||
Differences from translation of subsidiaries' financial statements | (50) | (50) | 14 | (36) | |||||
Deconsolidation of USSI (see Note 4(b)) | 541 | 541 | 3,700 | 4,241 | |||||
Expiration of warrants | 44 | (44) | |||||||
Initial shares in Leap Tide transaction (see Note 5) | $ 9 | 153 | 162 | 162 | |||||
Initial shares in Leap Tide transaction (see Note 5), shares | 850,000 | ||||||||
Reversal of adjustment for insufficient authorized shares | 50 | 50 | 50 | ||||||
Investment in OmniMetrix preferred shares | 1,000 | 1,000 | |||||||
Accrued dividend in OmniMetrix preferred shares | (15) | (15) | |||||||
Stock option compensation | 582 | 582 | 582 | ||||||
Stock option compensation of subsidiaries | 83 | 83 | |||||||
Balances at Dec. 31, 2015 | $ 281 | 98,977 | 1,597 | (97,191) | (3,036) | (262) | 366 | 1,292 | 1,658 |
Balances, shares at Dec. 31, 2015 | 28,128,000 | ||||||||
Net loss | 145 | 145 | (264) | (119) | |||||
Differences from translation of subsidiaries' financial statements | 8 | 8 | (2) | 6 | |||||
Accrued dividend in OmniMetrix preferred shares | (100) | (100) | |||||||
Stock option compensation | 89 | 89 | 89 | ||||||
Deconsolidation of DSIT (see Note 3) | 242 | 242 | (371) | (129) | |||||
Conversion of loan to Common Stock (see Note 19) | $ 5 | 110 | 115 | 115 | |||||
Conversion of loan to Common Stock (see Note 19), shares | 466,000 | ||||||||
Shares issued in connection with loan from Leap Tide (see Note 5) | $ 15 | 352 | 367 | 367 | |||||
Shares issued in connection with loan from Leap Tide (see Note 5), shares | 1,531,000 | ||||||||
Warrants issued | (3) | 3 | |||||||
Balances at Dec. 31, 2016 | $ 301 | $ 99,917 | $ 1,600 | $ (97,196) | $ (3,036) | $ (254) | $ 1,332 | $ 555 | $ 1,887 |
Balances, shares at Dec. 31, 2016 | 30,125,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows used in operating activities: | ||
Net loss | $ (119) | $ (10,802) |
Adjustments to reconcile net loss to net cash used in operating activities (see Schedule A) | (3,444) | 12,989 |
Net cash provided by (used in) operating activities - continuing operations | (3,563) | 2,187 |
Net cash used in operating activities - discontinued operations | (956) | (3,168) |
Net cash used in operating activities | (4,519) | (981) |
Cash flows provided by (used in) investing activities: | ||
Acquisitions of property and equipment | (33) | (159) |
Restricted deposits | (75) | (5,071) |
Release of restricted deposits | 868 | 1,065 |
Proceeds from the sale of interests in DSIT, net of transaction costs and cash divested | 3,947 | |
Escrow deposits | (579) | (100) |
Release of escrow deposits | 100 | |
Amounts funded for severance assets | (69) | (164) |
Net cash provided by (used in) investing activities - continuing operations | 4,159 | (4,429) |
Net cash provided by investing activities - discontinued operations | 900 | 720 |
Net cash provided by (used in) investing activities | 5,059 | (3,709) |
Cash flows provided by (used in) financing activities: | ||
Short-term bank credit, net | 1,156 | (590) |
Proceeds from Leap Tide transaction | 2,000 | |
Repayment of Leap Tide loan | (2,000) | |
Proceeds from director loans | 425 | |
Repayment of director loans | (275) | |
Proceeds from outside investment in OmniMetrix | 1,000 | |
Proceeds from the exercise of DSIT options | 391 | |
Repayments of long-term debt | (43) | (129) |
Net cash provided by (used in) financing activities - continuing operations | (346) | 2,281 |
Net cash used in financing activities - discontinued operations | (138) | (2,182) |
Net cash provided by (used in) financing activities | (484) | 99 |
Effect of exchange rate changes on cash and cash equivalents - continuing operations | (5) | 50 |
Effect of exchange rate changes on cash and cash equivalents - discontinued operations | 18 | (160) |
Net increase (decrease) in cash and cash equivalents | 69 | (4,701) |
Cash and cash equivalents at beginning of year - discontinued operations | 48 | 192 |
Cash and cash equivalents at beginning of year - continuing operations | 124 | 4,681 |
Cash and cash equivalents at end of year - discontinued operations | 19 | 48 |
Cash and cash equivalents at end of year - continuing operations | 222 | 124 |
Cash paid during the year for: | ||
Interest | 323 | 223 |
Income taxes, net of refunds | 4 | (26) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Loss from discontinued operations | 286 | 4,695 |
Depreciation and amortization | 146 | 314 |
Accretion of Leap Tide discount | 100 | 62 |
Common stock issued for Leap Tide interest accrued | 281 | |
Conversion to common stock of interest due to director | 15 | |
Gain on sale of interests in DSIT, net of income taxes and transaction costs | (3,543) | |
Share of income in DSIT | (268) | |
Change in deferred taxes | 18 | 258 |
Inventory write-down | 9 | 22 |
Increase in liability for accrued severance | 67 | 245 |
Stock-based compensation | 89 | 661 |
Deconsolidation of USSI | 401 | |
Other | 35 | (2) |
Changes in operating assets and liabilities: | ||
Decrease (increase) in accounts receivable | 218 | (2,235) |
Decrease (increase) in unbilled revenue | (949) | 4,041 |
Increase in inventory | (2) | (19) |
Decrease (increase) in other current assets and other assets | (170) | 55 |
Increase (decrease) in deferred revenue | (863) | 3,640 |
Increase in accounts payable, accrued payroll, payroll taxes and social benefits, other current and non-current liabilities | 1,087 | 851 |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities, total | (3,444) | 12,989 |
Non-cash investing and financing activities: | ||
Adjustment of paid-in-capital and non-controlling interest from the deconsolidation of DSIT | 242 | |
Conversion of director loan and interest to common stock | 115 | |
Investment in DSIT from deconsolidation | 5,390 | |
Liability for insufficient number of authorized shares in capital raise | (50) | |
Value of Initial Shares (discount) in Leap Tide transaction | 162 | |
Adjustment of paid-in-capital and non-controlling interest from the deconsolidation of USSI | 541 | |
Accrued preferred dividends to outside investor in OmniMetrix subsequently converted to long-term loan | $ 100 | $ 15 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2016 | |
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. Each of its businesses are focused on helping its customers achieve greater productivity, reliability, security and efficiency. The Company provides the following services and products: ● Power Generation (“PG”) and Corrosion Protection (“CP”) monitoring. TM ● Energy & Security Sonar Solutions. On April 21, 2016, the Company closed on a transaction for the sale of a portion of its interests in DSIT Solutions, Ltd. (the “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 DSIT Transaction, the Company has 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. The Company’s operations are based in the United States and through its investment in DSIT, in Israel. Acorn’s shares are traded on the OTCQB marketplace under the symbol ACFN. See Note 20 for segment information and major customers. (b) Liquidity As of December 31, 2016, the Company had less than $100 of non-escrow corporate cash and cash equivalents. In February 2017, the Company borrowed $900 from three of its directors and received a commitment from a director that would allow the Company to borrow up to an additional $1,000 on or after July 7, 2017 under certain conditions (see Note 22 – Subsequent Events). Such cash, together with the expected October 2017 receipt of escrowed funds from the DSIT Transaction (see Note 3) and reduced cash need from OmniMetrix based on their expected continued growth, is expected to finance the Company’s operations through at least the first quarter of 2018. The abovementioned director loans are due to be repaid at the earlier of April 30, 2018 or upon the sale of our remaining 41.2% interest DSIT which the Company is currently pursuing. Based on the above, the Company has sufficient cash to finance its operations for the next year. However, the Company may need to seek additional sources of funding if both of the following were to occur: (i) a failure by OmniMetrix to grow at the rate anticipated that necessitates additional funds for their operations, and (ii) the receipt of the escrowed funds from the DSIT sale is less than the Company anticipates. Additional sources of funding may include additional loans from related and/or non-related parties, a sale of our DSIT investment, a sale, partial sale or finding a strategic partner for OmniMetrix or equity financings. There can be no assurance additional funding will be available at acceptable terms or that the Company will be able to successfully utilize any of these possible sources to provide additional liquidity. (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 percentages of completion with respect to revenue recognition, uncertainties with respect to income taxes, inventories, 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. In these consolidated financial statements, “subsidiaries” are companies that are over 50% controlled, the accounts of which are consolidated with those of the Company. Significant intercompany transactions and balances are eliminated in consolidation; profits from intercompany sales, are also eliminated; non-controlling interests are included in equity. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity’s operating and financial decisions, the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. On April 21, 2016 (the “Closing Date”), the Company closed on a transaction (the “DSIT Transaction”) initially entered into on January 28, 2016 for the sale of a portion of its interests DSIT Solutions, Ltd. business to Rafael Advanced Defense Systems Ltd. (“Rafael”), a major Israeli defense company (see Note 3). As a result of the DSIT Transaction, the Company’s holdings in DSIT were reduced from 78.7% to 41.2%, and subsequent to the DSIT Transaction, the Company has limited representation on the DSIT Board of directors. Accordingly, after the Closing Date, the Company no longer consolidates the results of DSIT. Discontinued Operations In April 2016, the Company announced that it decided to cease operations of its GridSense subsidiary and initiate the liquidation of the GridSense assets. Following the decision to cease GridSense operations, the Company wrote down all GridSense assets to their estimated realizable values at the time and accrued for estimated severance costs and lease commitments. As a result of this decision, GridSense is reported as a discontinued operation in its consolidated financial statements for all periods presented (see Note 4(a)). In March 2015, the Company announced that it stopped funding USSI and that USSI had effectively suspended operations and terminated substantially all employees. On September 28, 2015, the Board of Directors of USSI approved a motion to file a voluntary petition for protection under Chapter 7 of the United States Bankruptcy Code (a “Chapter 7 Bankruptcy”). On September 30, 2015, USSI filed for a Chapter 7 Bankruptcy. Accordingly, effective September 30, 2015, the Company no longer consolidates the assets, liabilities or operating results of USSI (see Note 4(b)). Functional Currency and Foreign Currency Transactions The currency of the primary economic environment in which the operations of Acorn and its U.S. subsidiaries are conducted is the United States dollar (“dollar”). Accordingly, the Company and all of its U.S. subsidiaries use the dollar as their functional currency. The financial statements of DSIT whose functional currency is the New Israeli Shekel (“NIS”) have been translated in accordance with applicable accounting principles. Assets and liabilities are translated at year-end exchange rates, while revenues and expenses are translated at average exchange rates during the year. Differences resulting from translation are presented in equity as Accumulated Other Comprehensive Income. Gains and losses on foreign currency transactions and exchange gains and losses denominated in non-functional currencies are reflected in finance income (expense), net, in the Consolidated Statements of Operations when they arise. Cash Equivalents The Company considers all highly liquid investments, which include money market funds and short-term bank deposits (up to three months from date of deposit or with maturity of three months from date of purchase) that are not restricted as to withdrawal or use, to be cash equivalents. Accounts Receivable Accounts receivable consists of trade receivables. Trade receivables are recorded at the invoiced amount. Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. This allowance is based on specific customer account reviews and historical collections experience. If the financial condition of the Company’s funding parties or customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company performs ongoing credit evaluations of its customers and does not require collateral. During the years ended December 31, 2016 and 2015, $28 and $44 was charged to expense, respectively. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the operating results of DSIT. At December 31, 2016 and 2015, the balance in allowance for doubtful accounts was $11 and $20, respectively. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the allowance for doubtful accounts of DSIT. Inventory Inventories are comprised of components (raw materials), work-in-process and finished goods, which are measured at the lower of cost or market. OmniMetrix - Raw materials inventory is generally comprised of radios, cables, antennas, and electrical components. Finished goods inventory consists of fully assembled systems ready for final shipment to the customer. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and applicable shipping costs. DSIT - Raw materials inventory is comprised of arrays and receivers related to diver detection sonar (“DDS”) and portable diver detection sonar (“PDDS”) systems. Work-in-process inventory is primarily comprised of PDDS systems that have commenced with assembly as well as capitalized labor and overhead. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and shipping costs. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the inventory of DSIT. All inventories are periodically reviewed for impairment related to slow-moving and obsolete inventory. Non-Controlling Interests The Financial Accounting Standards Board (“FASB”) requires that non-controlling interests be reported as a component of equity, changes in a parent’s ownership interest while the parent retains its controlling interest be accounted for as equity transactions, and upon a loss of control, retained ownership interest be re-measured at fair value, with any gain or loss recognized in earnings. The Company attributes income and losses to the non-controlling interests associated with DSIT (up to the DSIT Transaction – see Note 3), OmniMetrix and USSI (up through its deconsolidation in September 2015 – See Note 4(b)). Property and Equipment Property and equipment are presented at cost at the date of acquisition. Depreciation and amortization is calculated based on the straight-line method over the estimated useful lives of the depreciable assets, or in the case of leasehold improvements, the shorter of the lease term or the estimated useful life of the asset, a portion of which is allocated to cost of sales. Improvements are capitalized while repairs and maintenance are charged to operations as incurred. Goodwill The Company assesses annually whether there is an indication that goodwill is impaired, or more frequently if events and circumstances indicate that the asset might be impaired during the year. The Company performs its annual impairment test in the fourth quarter of each year. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The Company identified its operating segments as its reporting units for purposes of the impairment test. The Company’s goodwill at December 31, 2015 was associated with its Energy & Security Sonar Solutions segment. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company eliminated this goodwill as part of the deconsolidation of DSIT. Treasury Stock Shares of common stock repurchased are recorded at cost as treasury stock. When shares are reissued, the cost method is used for determining cost. In accordance with GAAP, the excess of the acquisition cost over the reissuance price of the treasury stock, if any, is charged to additional paid-in capital, limited to the amount previously credited to additional paid-in capital, if any. Any excess is charged to accumulated deficit. Revenue Recognition The Company’s revenue recognition policy is consistent with applicable revenue recognition guidance and interpretations. The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. The Company assesses whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring. The Company’s sales arrangements generally include standard payment terms. These terms effectively relate to all customers, products, and arrangements regardless of customer type, product mix or arrangement size. If revenue recognition criteria are not satisfied, amounts received from customers are classified as deferred revenue on the balance sheet until such time as the revenue recognition criteria are met. Sales of OmniMetrix monitoring systems have multiple elements which include the sale of equipment and of monitoring services. Sales of OmniMetrix equipment do not qualify as a separate unit of accounting. As a result, revenues (and related costs) associated with sale of equipment are recorded to deferred revenue (and deferred charges) upon shipment for PG and CP units. Revenue and related costs with respect to the sale of equipment are recognized over the estimated life of the customer relationship which is estimated to be 24 months. Revenues from the prepayment of monitoring fees (generally paid 12 months in advance) are initially recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period. Revenue from fixed-price contracts at DSIT which require significant production, modification and/or customization to customer specifications are recognized using the percentage-of-completion method. Percentage-of-completion estimates are in man-months of labor and are reviewed periodically, and any adjustments required are reflected in the period when such estimates are revised. Losses on contracts, if any, are recognized in the period in which the loss is determined. Revenue from DSIT’s consulting, time-and-materials service contracts, maintenance agreements and other services are recognized as services are provided. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the revenue of DSIT. Unbilled Revenue Revenue may be earned by DSIT for those services in advance of amounts billable to the customer and are recognized when the service is performed. Revenues recognized in excess of amounts billed for projects in process are recorded as unbilled revenue. Such amounts are generally billed upon the completion of a project milestone. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the unbilled revenue of DSIT. Warranty Provision The Company’s OmniMetrix subsidiary generally grants their customers a one-year warranty on their respective products. DSIT generally grants its customers a one-to-two-year warranty on its projects. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the warranty provision of DSIT. Estimated warranty obligations are provided for as a cost of sales in the period in which the related revenues are recognized, based on management’s estimate of future potential warranty obligations and limited historical experience. Adjustments are made to accruals as warranty claim data and historical experience warrant. The Company’s warranty obligations may be materially affected by product or service failure rates and other costs incurred in correcting a product or service failure. Should actual product or service failure rates or other related costs differ from the Company’s estimates, revisions to the accrued warranty liability would be required. Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, escrow deposits and trade accounts receivable. The Company’s cash, cash equivalents and escrow deposits were deposited primarily with U.S. banks and brokerage firms and amounted to $801 at December 31, 2016. The Company does not believe there is significant risk of non-performance by these counterparties. See Note 20(d) with respect to revenue from significant customers and concentrations of trade accounts receivables and unbilled revenue. Financial Instruments Fair values of financial instruments included in current assets and current liabilities are estimated to approximate their book values, due to the short maturity of such instruments. Research and Development Expenses Research and development expenses consist primarily of labor and related expenses and are charged to operations as incurred. Participation by third parties in the Company’s research and development costs as well as credits arising from qualifying research and experimental development expenditures are netted against research and development. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the research and development expenses of DSIT. Advertising Expenses Advertising expenses are charged to operations as incurred. Advertising expense was $9 and $20 for each of the years ended December 31, 2016 and 2015, respectively. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the advertising expenses of DSIT. Stock-Based Compensation The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, we recognize expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. See Note 16(d) for the assumptions used to calculate the fair value of stock-based employee compensation. Upon the exercise of options, it is the Company’s policy to issue new shares rather than utilizing treasury shares. Deferred Income Taxes Deferred income taxes reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are classified as current or non-current based on the classification of the related assets or liabilities for financial reporting, or according to the expected reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date. At December 31, 2015, U.S. income taxes were not provided on undistributed earnings of the Company’s then DSIT subsidiary because such earnings were reinvested in foreign operations. If those earnings were repatriated to the U.S., the Company would not expect to owe additional U.S. income taxes due to the utilization of net operating loss carryovers. Income Tax Uncertainties The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on the two-step process prescribed by applicable accounting principles. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more likely than not being realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as this requires the Company to determine the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period. The Company recognizes interest and penalties as incurred in finance income (expense), net in the Consolidated Statements of Operations. Basic and Diluted Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the year, excluding treasury stock. Diluted net income (loss) per share is computed by dividing the net income (loss) 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 4,904,000 and 5,001,000 for the years ending December 31, 2016 and 2015, respectively. The following data represents the amounts used in computing EPS and the effect on net income and the weighted average number of shares of dilutive potential common stock: Year ended December 31, 2016 2015 Net income (loss) available to common stockholders $ 145 $ (10,599 ) Weighted average shares outstanding: -Basic 28,488 26,803 Add: Warrants 24 — Add: Stock options 19 — -Diluted 28,531 26,803 Basic and diluted net income (loss) per share $ 0.01 $ (0.40 ) Fair Value Measurement The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. See Notes 16, 21 and 22. Recently Issued Accounting Principles Other than the announcement noted below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the year ended December 31, 2016, that are of material significance, or have potential material significance, to the Company. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with adjustment of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The FASB issued several subsequent standards in 2016 containing implementation guidance related to the new standard. These standards provide additional guidance related to principal versus agent considerations, licensing, and identifying performance obligations. Additionally, these standards provide narrow-scope improvements and practical expedients as well as technical corrections and improvements. Overall, the new guidance is to be effective for the fiscal year beginning after December 15, 2017. Companies are able to early adopt the pronouncement, however not before fiscal years beginning after December 15, 2016. The Company currently anticipates that it will adopt this standard using the modified retrospective method. The Company is creating an implementation team to provide training and to review contracts to assess the impact, if any, the new revenue standard will have on its consolidated financial statements. The Company is monitoring for any additional implementation or other guidance that may be issued in 2017 with respect to the new revenue standard and adjust its assessment and implementation plans accordingly. In August 2014, the FASB issued ASU No. 2014-15 —Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued and if management’s plans will alleviate that doubt. Management will be required to make this evaluation for both annual and interim reporting periods. The Company adopted this guidance for the fiscal year ended December 31, 2016. This adoption did not have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This accounting standard that requires inventory be measured at the lower of cost and net realizable value and options that currently exist for measuring inventory at market value be eliminated. The standard defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation and is effective for reporting periods beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The guidance should be applied prospectively. The Company is evaluating the impact the adoption of this guidance will have on the determination or reporting of its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” which simplifies the balance sheet classification of deferred taxes. The new guidance requires that all deferred taxes be presented as noncurrent, rather than separated into current and noncurrent amounts. The guidance is effective for reporting periods beginning after December 15, 2016 and early adoption is permitted. In addition, the adoption of guidance can be applied either prospectively or retrospectively to all periods presented. The Company does not believe that this new accounting pronouncement will have a material impact on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01 “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted under certain circumstances.” The Company is currently assessing the impact of ASU 2016-01 on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, which is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 with early adoption permitted. Under Accounting Standards Update 2016-02, lessees will be required to recognize for all leases at the commencement date a lease liability, which is a lessee’s obligation to make lease payments arising from a lease measured on a discounted basis, and a right-to-use asset, which is an asset that represents the lessee’s right to use or control the use of a specified asset for the lease term. The Company is currently evaluating the effect that the new guidance will have on its financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, including treatment of excess tax benefits and forfeitures, as well as consideration of minimum statutory tax withholding requirements. The ASU will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early application permitted in any interim or annual period. The Company is evaluating the future impact of this ASU on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15 Cash Flow Statement (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. This new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice, including: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and is not expected to have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash a consensus of the FASB Emerging Issues Task Force. This new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019 and is not expected to have a material impact on the Company’s consolidated financial statements. Reclassifications Certain reclassifications have been made to the Company’s prior year’s consolidated financial statements to conform to the current year’s consolidated financial statement presentation. |
DSIT Solutions, Ltd. ('DSIT')
DSIT Solutions, Ltd. ('DSIT') | 12 Months Ended |
Dec. 31, 2016 | |
Dsit Solutions Ltd. Dsit | |
DSIT Solutions, Ltd. ("DSIT") | NOTE 3—DSIT SOLUTIONS, LTD. (“DSIT”) On April 21, 2016 (the “Closing Date”), the Company closed on a transaction (the “DSIT Transaction”) initially entered into on January 28, 2016 for the sale of a portion of its interests DSIT Solutions, Ltd. business to Rafael Advanced Defense Systems Ltd., a major Israeli defense company. At closing, Acorn received gross proceeds of $4,913 before escrow, fees and taxes. From the gross proceeds, the Company deposited approximately $579 to satisfy the escrow requirements in the sale. The Company expects the escrow deposit to be released 18 months from the Closing Date. The Company also paid an Israeli withholding tax of approximately $266 and incurred transaction costs of $184. In connection with the DSIT Transaction, the Company recorded a gain of $3,543 (of which $2,574 is the portion related to the step-up in value of the Company’s retained non-controlling investment). The Company is also eligible to receive its 82.4% pro-rata share of a $1,000 earn-out over a three-year period if certain operating results targets are met. The earn-out is not included in the determination of the gain in the DSIT Transaction as management does not believe it is probable that certain thresholds will be met. DSIT did not meet the operating result target for the 2016 earn-out. Prior to the Closing Date, all options in the DSIT Key Employee Stock Option Plan were exercised and DSIT received proceeds of $391, and the Company’s holdings in DSIT were reduced from 88.3% to 78.7%. As a result of the DSIT Transaction, the Company’s holdings in DSIT were reduced from 78.7% to 41.2%, and subsequent to the DSIT Transaction, the Company has limited representation on the DSIT Board of directors. Accordingly, after the Closing Date, the Company no longer consolidates the results of DSIT. Assets and liabilities related to the deconsolidated operations of DSIT are as follows: December 31, 2016 At the Closing Date December 31, 2015 (unaudited) (unaudited) (unaudited) Current assets: Cash and cash equivalents $ 1,047 $ 516 7 Restricted deposits 2,648 2,517 2,172 Accounts receivable 2,825 5,166 5,826 Unbilled revenue 4,918 4,779 3,849 Inventory 481 297 230 Other current assets 795 935 698 Total current assets 12,714 14,210 12,782 Property and equipment, net 569 620 654 Severance assets 3,915 3,762 3,558 Restricted deposits 646 1,815 2,951 Due from Acorn 1,171 916 802 Goodwill — 536 516 Other assets 339 80 124 Total assets $ 19,354 $ 21,939 21,387 Current liabilities: Short-term bank credit and current maturities of long-term bank debt $ 1,239 $ 2,655 1,917 Accounts payable 1,461 2,072 1,869 Accrued payroll, payroll taxes and social benefits 1,142 1,286 1,261 Deferred revenue 431 2,219 3,487 Other current liabilities 2,736 1,615 1,417 Total current liabilities 7,009 9,847 9,951 Accrued severance 5,374 5,209 4,984 Other long-term liabilities 9 38 82 Total liabilities $ 12,392 $ 15,094 15,017 The Due from Acorn balance at December 31, 2016 is comprised of a loan of $340 from DSIT and unreimbursed expenses of $591, both of which accrue interest at 3.15% per annum. Such balances are due the earlier of April 30, 2018 or the sale of Acorn’s remaining shares in DSIT. In addition to the above balances, the Due from Acorn balance also includes $240 with respect to provisions for severance and vacation for the Company’s CFO who is an employee of DSIT. The loan from DSIT to Acorn is secured by the Company’s shares of DSIT. DSIT’s results that were included in the Company’s Consolidated Statements of Operations for the period from January 1, 2016 until the closing of the DSIT Transaction and for the year ended December 31, 2015 can be seen below: January 1, 2016 – April 21, 2016 Year ended December 31, 2015 (unaudited) (unaudited) Revenue $ 5,074 $ 13,501 Cost of sales 3,443 9,125 Gross profit 1,631 4,376 Research and development expenses, net 469 1,191 Selling, general and administrative expenses 1,063 3,162 Operating income 99 23 Finance expense, net (39 ) (112 ) Income before income taxes 60 (89 ) Income tax expense (19 ) (259 ) Net income 41 (348 ) Net income attributable to non-controlling interests (9 ) 49 Net loss attributable to Acorn Energy Inc. $ 32 $ (299 ) As indicated above, after the Closing Date, the Company no longer consolidates the results of DSIT. After the Closing Date, the Company accounts for its investment in DSIT under the equity method. The initial balance of the Company’s investment in DSIT ($5,390) was determined based on the fair value of its 41.2% holdings in DSIT following the DSIT Transaction and the $13,100 value attributed to DSIT in the DSIT Transaction. DSIT’s results and the Company’s share of its net income for the period from the Closing Date to December 31, 2016 can be seen below: (unaudited) Revenue $ 11,777 Cost of sales 7,795 Gross profit 3,982 Research and development expenses, net 642 Selling, general and administrative expenses 2,721 Operating income 619 Finance expense, net (134 ) Income before income taxes 485 Income tax benefit 169 Net income $ 654 Acorn’s share of net income in DSIT $ 268 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | NOTE 4— Discontinued Operations (a) GridSense On April 21, 2016, the Company announced that it decided to cease operations of its GridSense subsidiary and initiate the liquidation of the GridSense assets. As a result of this decision, GridSense is being reported as a discontinued operation. Following the decision to cease GridSense operations, the Company wrote down all GridSense assets to their estimated realizable values at the time and accrued for estimated severance costs of $140 and lease commitments of $100 in GridSense’s first quarter results. On July 12, 2016, the Company and its GridSense subsidiary completed the sale of the GridSense assets to Franklin Fueling Systems, Inc., a wholly-owned subsidiary of Franklin Electric Co., Inc. for a gross sales price of $1,000 of which $100 was set aside as an indemnity escrow. Under the terms of the escrow, if there were no pending indemnifiable claims, $50 was to be released to GridSense on January 7, 2017, with the balance to be released to GridSense on July 7, 2017. The buyers refused to authorize the escrow agent to release the $50 on January 7, 2017 and, subsequent to that date, submitted purported third-party indemnifiable claims which the Company believes to be both untimely and without merit. This dispute has yet to be resolved. Following the sale, GridSense paid off approximately $240 of previously accrued severance and other payroll costs. GridSense recorded a gain of $944 (net of transaction costs) on this transaction as the value of the GridSense assets sold had previously been written down to nearly zero. Such gain was included in discontinued operations in the third quarter of 2016. Also, following the sale, GridSense engaged a third-party liquidation officer to satisfy, to the extent of the funds available from the remaining proceeds, the claims of GridSense creditors, including Acorn which is GridSense’s largest creditor. Through December 31, 2016, the third-party liquidator settled approximately $459 of outside creditor claims while disbursing approximately $47 to those creditors. At December 31, 2016, GridSense had approximately $19 of cash available (excluding escrow amounts) for satisfaction of remaining creditor claims of approximately $314. Assets and liabilities related to the discontinued operations of GridSense are as follows: As of December 31, 2016 December 31, 2015 Cash $ 19 $ 48 Other current assets and non-current assets 100 1,060 Total assets $ 119 $ 1,108 Short-term bank credit $ — $ 138 Accounts payable 501 950 Accrued payroll, payroll taxes and social benefits 90 186 Other current and non-current liabilities 406 572 Total liabilities $ 997 $ 1,846 GridSense had a working agreement with its bank to allow GridSense to borrow against 80% of certain accounts receivable balances up to $750 at an interest equal to 1.25% per month. At December 31, 2015, GridSense was utilizing approximately $138 of its accounts receivable line. Such balance was repaid prior to the expiration of the accounts receivable line on July 16, 2016. GridSense’s operating results for the years ended December 31, 2015 and 2016 are included in “Income (loss) from discontinued operations, net of income taxes” in the Company’s Consolidated Statements of Operations. Selected financial information for GridSense’s operations for those periods are presented below: Year ended December 31, 2016 2015 Revenue $ 212 $ 2,507 Gross profit $ 28 $ 21 Net loss $ (286 ) $ (3,923 ) (b) US Seismic Systems Inc. (“USSI”) As of January 1, 2015, the Company owned 9,376,401 shares of USSI’s Series A-1 Preferred Stock (“USSI Preferred Stock”). Such holdings in USSI’s Preferred Stock together with the common stock owned by the Company represented approximately 95.7% of USSI on an as converted basis. Through September 30, 2015, the Company invested $7,584 in USSI common shares (of which $5,355 was in cash and $2,229 was in Acorn common shares) and an additional $16,750 in USSI Preferred Stock. In addition, the Company lent USSI a total of $10,058. Such loans bore interest at 8% per annum. In early 2015, the Company’s Board of Directors decided that it would no longer continue to fund USSI’s activities following the significant decline in oil prices which led to significantly reduced demand for USSI’s products. At that time, USSI effectively suspended operations and terminated substantially all employees. On September 28, 2015, the Board of Directors of USSI approved a motion to file a voluntary petition for protection under Chapter 7 of the United States Bankruptcy Code (a “Chapter 7 Bankruptcy”). Such filing was made on September 30, 2015. Under a Chapter 7 Bankruptcy, control of USSI no longer rests with the Company, but rather with a court-appointed trustee. Accordingly, effective September 30, 2015, the Company no longer consolidated the assets, liabilities or operating results of USSI. Following USSI’s Chapter 7 Bankruptcy, the Company does not expect that there will be any cash available to repay any of the aforementioned loaned amounts after the disposition of USSI’s assets. Assets and liabilities related to the discontinued operations of USSI were as follows: At September 29, 2015 – prior to deconsolidation Cash and cash equivalents $ — Other current assets — Total assets $ — Short-term bank credit $ 999 Accounts payable 1,029 Accrued payroll, payroll taxes and social benefits 90 Other current liabilities 1,721 Total liabilities $ 3,839 USSI’s losses for the year ended December 31, 2015 are included in “Loss from discontinued operations, net of income taxes” in the Company’s Consolidated Statements of Income. Summarized financial information for USSI’s operations for the period is presented below: Year ended December 31,2015 Revenues $ 163 Gross profit $ (68 ) Net loss $ (772 ) Loss on deconsolidation $ (401 ) Loss from discontinued operations, net of income taxes $ (1,173 ) Net loss includes stock-based compensation expense of $4 in the year ended December 31, 2015. |
Leap Tide Financing Transaction
Leap Tide Financing Transaction | 12 Months Ended |
Dec. 31, 2016 | |
Leap Tide Financing Transaction | |
Leap Tide Financing Transaction | NOTE 5—LEAP TIDE FINANCING TRANSACTION On August 13, 2015, the Company executed a Loan and Security Agreement with Leap Tide Capital Partners III, LLC (“Leap Tide”), pursuant to which the Company borrowed $2,000 from Leap Tide (the “LT Loan”). Principal and accrued interest was due and payable on August 13, 2016. Interest accrued and was payable quarterly at a rate of 10% per annum. On April 29, 2016, following the receipt of the net proceeds from the DSIT Transaction (see Note 3), the Company repaid in full the $2,000 of principal and all accrued interest in full satisfaction of the cash due to Leap Tide under the LT Loan. In addition to the interest payable in cash described above, Leap Tide received 850,000 shares of the Company’s common stock (the “Initial Shares”) at the closing and was entitled to vested rights to receive 179,167 additional shares of the Company’s common stock (each vested right to receive one share, a “Vested Share Right”) per month for each full month that the full principal amount of the LT Loan was outstanding. The number of Vested Share Rights that accrued in a given month was prorated to the extent less than the full principal amount was outstanding and/or for any partial month in which no principal amount was outstanding. Through April 29, 2016, the date of repayment, Leap Tide earned 1,531,396 Vested Share Rights. Under the terms of the LT Loan, the Company had the right on or prior to 30 days after the repayment of the LT Loan (the “Cash Settlement Period”) to repurchase any or all Initial Shares and settle any or all Vested Share Rights accrued under the LT Loan for cash in lieu of stock. The cash repurchase/settlement price would have been $0.30 for each Initial Share so repurchased and each Vested Share Right so settled. The Company did not repurchase any of the Initial Shares or settle any of the accrued Vested Share Rights for cash and all 1,531,396 Vested Share Rights were converted into 1,531,396 shares of Common Stock of the Company after the expiration of the Cash Settlement Period. At December 31, 2015, the Company recorded a liability (and interest expense) of $86 with respect to the market value of the common stock to be granted upon vesting of the Vested Share Rights. During the year ended December 31, 2016, the Company recorded additional interest expense of $281 with respect to the vesting of the Vested Share Rights. The value of the Initial Shares ($162) at closing was treated as a discount to the loan and was being amortized to interest expense over the one-year period of the LT Loan. Through December 31, 2015, $62 of the discount associated with the Initial Shares was amortized and the remaining discount of $100 was amortized in the year ended December 31, 2016. Concurrent with the LT Loan, Jan H. Loeb, Manager of Leap Tide, joined the Board of Directors of the Company. Effective January 28, 2016, Acorn engaged Jan H. Loeb to be the Company’s President and CEO. Certain members of the management of DSIT (including its CEO and its CFO - who also serves as CFO of the Company) invested in Leap Tide (which is a special entity formed to make the loan) on the same terms as the other investors in Leap Tide. None of these persons had any role in the management of Leap Tide. |
Investment in Omnimetrix
Investment in Omnimetrix | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Investment in Omnimetrix | NOTE 6—INVESTMENT IN OMNIMETRIX On October 16, 2015, one of the Company’s directors acquired a 10% interest in the Company’s OmniMetrix Holdings, Inc. subsidiary (“Holdings”) for $500 through the purchase of preferred stock. Holdings is the holder of 100% of the membership interests OmniMetrix, LLC through which the Company operates its M2M and pipeline monitoring activities. In the transaction, the director acquired 1,000 shares of Series A Preferred Stock (the “OmniMetrix Preferred Stock”) of Holdings. Subsequently, on November 23, 2015, the director acquired an additional 1,000 shares of OmniMetrix Preferred Stock for an additional $500. The $1,000 investment by the director has been recorded as an increase in non-controlling interests. A dividend of 10% per annum accrues on the OmniMetrix Preferred Stock. The dividend is payable on the first anniversary of the funding of the investment and quarterly thereafter for so long as the OmniMetrix Preferred Stock is outstanding and has not been converted to Common Stock. The dividend is payable in cash or the form of additional shares of OmniMetrix Preferred Stock at the election of the holder of the Preferred Stock. Through December 31, 2016, a dividend payable of $115 was recorded with respect to the OmniMetrix Preferred Stock. On December 31, 2016, the director agreed to treat the $115 of accrued dividends (and may agree to treat future accrued dividends) as a loan to OmniMetrix which bear interest at 8% per year. All amounts due (principal and interest) are due the later of April 30, 2018 or 90 days following the advance of a new loan (quarterly dividend accrual). In December 2016, the director provided OmniMetrix with a $50 loan under the same terms as the abovementioned accrued dividends. The OmniMetrix Preferred Stock may convert at the option of the holder of the OmniMetrix Preferred Stock on a one-for-one basis into Common Stock, subject to appropriate adjustments for corporate reorganizations, mergers, stock splits, etc. The OmniMetrix Preferred Stock has full ratchet anti-dilution protection and will not be diluted by any issuances below a pre-money equity valuation of $5,500 for OmniMetrix. The Company has the right to drag along the holder of the OmniMetrix Preferred Stock in the event of a sale by Acorn of at least a majority of its shares in OmniMetrix and the holder of the OmniMetrix Preferred Stock has the right to tag along on any such sale. |
Restructuring and Related Charg
Restructuring and Related Charges | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Charges | NOTE 7 — RESTRUCTURING AND RELATED CHARGES In 2013, OmniMetrix restructured its operations to better align expenses with revenues following a change in management. The restructuring involved employee severance and termination benefits as well as a charge for a significant reduction in the utilization of its leased facility in Buford and a write-down of a majority of the remaining book value of leasehold improvements associated with the leased facility. At December 31, 2014, $248 of lease payments associated with the reduced utilization of leased facilities remained unpaid. During the year ended December 31, 2015, OmniMetrix paid $44 of this liability. The remaining accrued restructuring balance at December 31, 2015 of $204 is included in Other current liabilities ($45) and Other long-term liabilities ($159) in the Company’s Consolidated Balance Sheets. During the year ended December 31, 2016, OmniMetrix paid $45 of this liability. The remaining accrued restructuring balance at December 31, 2016 of $159 is included in Other current liabilities ($46) and Other long-term liabilities ($113) in the Company’s Consolidated Balance Sheets. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 8—INVENTORY As of December 31, 2016 2015 Raw materials $ 156 $ 287 Work-in-process — 189 Finished goods 46 30 $ 202 $ 506 During 2016 and 2015 the Company recorded inventory impairment charges of $9 and $22, respectively, in its PG segment. At December 31, 2016 and 2015, the Company’s inventory reserve was $31 and $22, respectively. Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer includes DSIT inventory on the Company’s consolidated balance sheets. Inventory at December 31, 2015 include $41 of raw materials and $189 of work-in-process related to DSIT |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2016 | |
Other Current Assets | |
Other Current Assets | NOTE 9—OTHER CURRENT ASSETS Other current assets consist of the following: As of December 31, 2016 2015 Prepaid expenses and deposits $ 83 $ 260 Deferred costs 829 813 Deferred taxes — 141 Funded severance assets — 51 Employee advances 2 105 R&D participation receivable — 168 Other 18 95 $ 932 $ 1,633 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 10—PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following: Estimated Useful Life As of December 31, (in years) 2016 2015 Cost: Computer hardware and software 3 - 5 $ 78 $ 1,296 Equipment 7 218 854 Leasehold improvements Term of lease 339 900 635 3,050 Accumulated depreciation and amortization Computer hardware and software 61 1,202 Equipment 159 347 Leasehold improvements 201 547 421 2,096 Property and equipment, net $ 214 $ 954 Depreciation and amortization in respect of property and equipment amounted to $146 and $314 for 2016 and 2015, respectively. Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT’s Property and Equipment. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 11—GOODWILL The changes in the carrying amounts of goodwill by segment from December 31, 2014 to December 31, 2016 were as follows: Energy & Security Sonar Solutions segment Balance at December 31, 2014 $ 518 Impairment — Translation adjustment (2 ) Balance at December 31, 2015 516 Translation adjustment 20 Deconsolidation of DSIT (536 ) Balance at December 31, 2016 $ — Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company eliminated this goodwill as part of the deconsolidation of DSIT. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 12—DEBT (a) OmniMetrix In February 2016, OmniMetrix signed a Loan and Security Agreement with a lender providing OmniMetrix with access to accounts receivable formula-based financing of up to $500. In connection with this financing arrangement, OmniMetrix granted the lender a security interest in OmniMetrix’s receivables, inventory and certain other assets. Debt incurred under this financing arrangement bears interest at the greater of prime (3.75% at December 31, 2016) plus 2% or 6% per year. In addition, OmniMetrix was to pay a monthly service charge of 1.125% of the average aggregate principal amount outstanding for the prior month, for a current effective rate of interest on advances of 19.5%. In September 2016, the abovementioned Loan and Security Agreement was amended to reflect a reduced monthly service charge of 1.0% and modified formula determining the amount available from 80% of eligible hardware invoices and 40% of eligible monitoring invoices to 75% of all eligible invoices. In return, OmniMetrix agreed to maintain a minimum loan balance of $150 in its line-of-credit with the lender for a minimum of one year beginning October 1, 2016. The Loan and Security Agreement expires September 30, 2017. At December 31, 2016, OmniMetrix had an outstanding balance of approximately $376 pursuant to the amended Loan and Security Agreement. (b) DSIT At December 31, 2015, DSIT had lines-of-credit of approximately $1,180 from two Israeli banks of which $979 was then being utilized. The lines-of-credit are denominated in NIS and bore interest at a weighted average rate of 3.1% per annum. In addition, to the above lines-of-credit, in December 2014, DSIT entered in an agreement with another bank to allow DSIT to borrow against certain accounts receivable balances at an interest equal to the Israeli prime rate plus 1.8%. At December 31, 2015, DSIT had borrowed $862 against certain accounts receivable balances. In July 2014, DSIT took a loan from one of its banks. The loan was for NIS 1,000 (approximately $292 at the then exchange rate) to be repaid over a period of two years with monthly payments of approximately $11. The loan principal was linked to the Israeli CPI and bore interest at 1.0% per annum. Total amounts due with respect to the loan were $75 at December 31, 2015. During the period from January 1, 2016 to the Closing Date, $43 of the loan balance was repaid. Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT’s debt in its consolidation financial statements. (c) Summary As of December 31, 2016 2015 DSIT line-of-credit $ — $ 979 DSIT borrowings against receivables — 862 Current maturities of long-term debt — 75 OmniMetrix borrowings against receivables 376 — Total debt $ 376 $ 1,916 |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Other Current Liabilities | NOTE 13—OTHER CURRENT LIABILITIES Other current liabilities consist of the following: As of December 31, 2016 2015 Accrued expenses $ 518 $ 2,081 Taxes 38 12 Warranty provision 27 122 Restructuring liabilities 46 45 $ 629 $ 2,260 Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT’s Other Current Liabilities. |
Accrued Severance, Severance As
Accrued Severance, Severance Assets and Retirement Plans | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Accrued Severance, Severance Assets and Retirement Plans | NOTE 14—ACCRUED SEVERANCE, SEVERANCE ASSETS AND RETIREMENT PLANS (a) Accrued Severance and Severance Assets (i) Israeli labor law and certain employee contracts generally require payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company has recorded under liability for employee termination benefits the amount that would be paid if all its Israeli employees were dismissed at the balance sheet date, on an undiscounted basis, in accordance with Israeli labor law. This liability is computed based upon the employee’s number of years of service and salary components, which in the opinion of management create entitlement to severance pay in accordance with labor agreements in force. The amounts due were determined based on the employees’ current salary rates and the number of service years that will be accumulated upon their retirement date. The non-current portion of the liability is reflected on the Company’s Consolidated Balance Sheets as Accrued severance while the current portion of the liability is reflected on the Company’s Consolidated Balance Sheets in Accrued payroll, payroll taxes and social benefits. The liability is partially funded by sums deposited in dedicated funds in respect of employee termination benefits and is reflected on the Company’s Consolidated Balance Sheets as Severance assets. For certain Israeli employees, the Company’s liability is covered mainly by regular contributions to defined contribution plans. (ii) Severance pay contributions to dedicated funds amounted to $138 and $375 for the years ended December 31, 2016 and 2015, respectively. (Contributions for the year ended December 31, 2016 represent contributions made by DSIT up to the DSIT Transaction – see Note 3.) (iii) The table below provides a breakdown of the Company’s severance liability and severance assets as of December 31, 2016 and 2015. As of December 31, 2016 2015 Current severance liability (included in Accrued payroll, payroll taxes and social benefits) $ 279 $ 41 Non-current severance liability — 4,984 Total severance liability $ 279 $ 5,025 Current severance assets (included in Other current assets) $ — $ 51 Non-current severance assets — 3,558 Total severance assets $ — $ 3,609 Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT’s Severance Assets or Accrued Severance. (b) Defined Contribution Plans The Company maintains a defined contribution plan for its U.S. salaried employees meeting age and service requirements, which allows participants to make contributions by salary reduction pursuant to Section 401(k) of the Internal Revenue Code. The Company contributes 3% of employees’ salaries for those meeting the age and service requirements. Such contribution has been terminated effective January 1, 2017. The expense related to the employer portion for the years ending December 31, 2016 and 2015 was $45 (including $4 related to discontinued operations) and $100 (including $50 related to discontinued operations), respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 15—COMMITMENTS AND CONTINGENCIES (a) Leases of Property and Equipment Office rental and automobile leasing expenses for 2016 and 2015 were $245 and $638, respectively (not including $67 and $158 in 2016 and 2015, respectively, related to discontinued operations). Leasing expenses include $179 and $528 in 2016 and 2015, respectively, related to DSIT. Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT’s leasing expenses. The Company and its OmniMetrix subsidiary lease office space and equipment under operating lease agreements. Those leases will expire on different dates from 2017 to 2019. Future minimum lease payments on non-cancelable operating leases as of December 31, 2016 are as follows: Years ending December 31, 2017 $ 107 2018 110 2019 109 2020 — 2021 and thereafter — $ 326 |
Equity
Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Equity | NOTE 16—EQUITY (a) General At a special meeting of the stockholders on March 16, 2016, the Company’s stockholders approved an amendment to its restated certificate of incorporation to increase the number of authorized shares of capital stock from 30,000,000 shares to 42,000,000 shares, all of which shall be common stock. At December 31, 2016 the Company had issued and outstanding 29,322,574 shares of its common stock, par value $0.01 per share. Holders of outstanding common stock are entitled to receive dividends when, as and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company. Holders of common stock do not have subscription, redemption, conversion or other preemptive rights. Holders of the common stock are entitled to elect all of the Directors on the Company’s Board. Holders of the common stock do not have cumulative voting rights, meaning that the holders of more than 50% of the common stock can elect all of the Company’s Directors. Except as otherwise required by Delaware General Corporation Law, all stockholder action is taken by vote of a majority of shares of common stock present at a meeting of stockholders at which a quorum (a majority of the issued and outstanding shares of common stock) is present in person or by proxy or by written consent pursuant to Delaware law (other than the election of Directors, who are elected by a plurality vote). On July 21, 2016, the Company’s stockholders approved an amendment to the Company’s restated certificate of incorporation to authorize a reverse split of the Company’s common stock at any time prior to July 21, 2017, at a ratio between one-for-ten and one-for-twenty, if and as determined by the Company’s Board of Directors. The Company is not authorized to issue preferred stock. Accordingly, no preferred stock is issued or outstanding. (b) Leap Tide Financing Transaction – See Note 5. (c) Conversion of director loan to common stock – See Note 19. (d) Summary Employee Option Information The Company’s stock option plans provide for the grant to officers, directors and other key employees of options to purchase shares of common stock. The purchase price may be paid in cash or at the end of the option term, if the option is "in-the-money", it is automatically exercised "net". In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee, but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable to one share of the Company’s common stock. Most options expire within five to ten years from the date of the grant, and generally vest over three year period from the date of the grant. At the annual meeting of stockholders on September 11, 2012, the Company’s stockholders approved an Amendment to the Company’s 2006 Stock Incentive Plan to increase the number of available shares by 1,000,000 and an Amendment to the Company’s 2006 Stock Incentive Plan for Non-Employee Directors to increase the number of available shares by 200,000. At December 31, 2016, 979,650 options were available for grant under the 2006 Amended and Restated Stock Incentive Plan and no options were available for grant under the 2006 Director Plan. In 2015 and 2016, there were no grants to non-employees. No options were exercised in the years ended December 31, 2015 or 2016. The intrinsic value of options outstanding and of options exercisable at December 31, 2016 was $2 and $2, respectively. The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages): 2016 2015 Risk-free interest rate 1.5 % 2.1 % Expected term of options, in years 6.5 8.6 Expected annual volatility 80 % 63 % Expected dividend yield — % — % Determined weighted average grant date fair value per option $ 0.11 $ 0.51 The expected term of the options is the length of time until the expected date of exercising the options. With respect to determining expected exercise behavior, the Company has grouped its option grants into certain groups in order to track exercise behavior and establish historical rates. The Company estimated volatility by considering historical stock volatility over the expected term of the option. The risk-free interest rates are based on the U.S. Treasury yields for a period consistent with the expected term. The Company expects no dividends to be paid. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in determining the estimated fair value of the Company’s stock options granted in the years ended December 31, 2015 and 2016. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. (e) Summary Option Information A summary of the Company’s option plans as of December 31, 2016 and 2015, as well as changes during each of the years then ended, is presented below: 2016 2015 Number of Options (in shares) Weighted Average Exercise Price Number of Options (in shares) Weighted Average Exercise Price Outstanding at beginning of year 2,364,918 $ 3.51 1,812,428 $ 4.51 Granted at market price 65,000 0.15 687,654 0.75 Exercised — — — — Forfeited or expired (379,549 ) 2.29 (135,164 ) 2.91 Outstanding at end of year 2,050,369 3.62 2,364,918 3.51 Exercisable at end of year 2,004,534 $ 3.69 1,778,503 $ 4.16 Summary information regarding the options outstanding and exercisable at December 31, 2016 is as follows: Outstanding Exercisable Range of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price (in shares) (in years) (in shares) $0.14 – $1.06 677,301 5.8 $ 0.74 644,800 $ 0.76 $1.68 – $2.49 307,985 4.7 $ 1.74 294,651 $ 1.75 $3.51 – $5.00 279,368 3.5 $ 4.22 279,368 $ 4.22 $5.05 – $5.91 320,000 1.4 $ 5.21 320,000 $ 5.21 $6.31 - $7.57 302,356 3.2 $ 6.90 302,356 $ 6.97 $7.60 - $11.42 163,359 2.8 $ 8.82 163,359 $ 8.82 2,050,369 2,004,534 Stock-based compensation expense included in the Company’s Consolidated Statements of Operations was: Year ended December 31, 2016 2015 Cost of sales* $ — $ 16 Research and development expense* — 4 Selling, general and administrative expense* 89 641 Total $ 89 $ 661 * Includes $16, $4 and $59 in Cost of sales, Research and development expense and Selling, general and administrative expense, respectively, for the year ended December 31, 2015 with respect to DSIT. See Note 4 with respect to stock-based compensation expense associated with discontinued operations. As of December 31, 2016, the total compensation cost related to non-vested awards not yet recognized was approximately $6 which the Company expects to recognize over a weighted-average period of approximately 0.8 years. (f) DSIT Stock Option Plan In November 2006, the Company adopted a Key Employee Stock Option Plan (the “DSIT Plan”) for its DSIT subsidiary to be administrated by a committee of board members of DSIT, currently comprised of the entire board of directors of DSIT. The purpose of the DSIT Plan and associated grants is to provide incentives to key employees of DSIT to further the growth, development and financial success of DSIT. A summary status of the DSIT Plan as of December 31, 2016 and 2015, as well as changes during the years then ended, is presented below: 2016 2015 Number of Options (in shares)* Weighted Average Exercise Price Number of Options (in shares)* Weighted Average Exercise Price Outstanding at beginning of year 239,524 $ 1.65 239,524 $ 1.67 Granted at fair value — $ — — $ — Exercised (239,524 ) $ 1.63 — $ — Forfeited — $ — — $ — Outstanding at end of year — $ — 239,524 $ 1.65 Exercisable at end of year — $ — 239,524 $ 1.65 *The exercise price of 91,754 of these options was NIS 9.38 translated to US dollars using following exchange rates: NIS 3.89 for December 31, 2014, NIS 3.90 for December 31, 2015, and 3.97 for the Closing Date. (g) Warrants The Company has issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows: 2016 2015 Number of shares underlying warrants Weighted Average Exercise Price Number of shares underlying warrants Weighted Average Exercise Price Outstanding at beginning of year 2,619,423 $ 1.48 2,642,423 $ 1.50 Granted 35,000 $ 0.13 — — Exercised — — — — Forfeited or expired — — (23,000 ) $ 3.68 Outstanding and exercisable at end of year 2,654,423 $ 1.46 2,619,423 $ 1.48 The warrants outstanding at December 31, 2016 have a weighted average remaining contractual life of 3.2 years. The fair value of the warrants granted ($0.08 per warrant) was estimated on the grant dates using the Black-Scholes option-pricing model with the following weighted average assumptions: Risk-free interest rate 1.79 % Expected term of warrants 7.0 years Expected annual volatility 78 % Expected dividend yield — % |
Finance Income (Expense), Net
Finance Income (Expense), Net | 12 Months Ended |
Dec. 31, 2016 | |
Finance Income Expense Net | |
Finance Income (Expense), Net | NOTE 17—FINANCE INCOME (EXPENSE), NET Finance income (expense), net consists of the following: Year ended December 31, 2016 2015 Interest income $ 1 $ 26 Interest expense* (604 ) (420 ) Exchange gain, net 31 67 $ (572 ) $ (327 ) * Interest expense includes $446 and $225 associated with the LT Loan in 2016 and 2015, respectively (see Note 5). |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 18—INCOME TAXES (a) Composition of income (loss) from continuing operations before income taxes is as follows: Year ended December 31, 2016 2015 Domestic $ (142 ) $ (5,409 ) Foreign 60 (88 ) $ (82 ) $ (5,497 ) Income tax expense (benefit) consists of the following: Year ended December 31, 2016 2015 Current: Federal $ — $ — State and local — — Foreign — (50 ) — (50 ) Deferred: Federal — — State and local — — Foreign 19 259 19 259 Total income tax expense $ 19 $ 209 (b) Effective Income Tax Rates Set forth below is a reconciliation between the federal tax rate and the Company’s effective income tax rates with respect to continuing operations: Year ended December 31, 2016 2015 Statutory Federal rates 34 % 34 % Increase (decrease) in income tax rate resulting from: Tax on foreign activities (2 ) 6 Other, net (primarily permanent differences) (200 ) (4 ) Valuation allowance 145 (40 ) Effective income tax rates (23 )% (4 )% (c) Analysis of Deferred Tax Assets and (Liabilities) As of December 31, 2016 2015 Deferred tax assets (liabilities) consist of the following: Employee benefits and deferred compensation $ 1,745 $ 1,722 Investments and asset impairments 2,619 2,693 Other temporary differences (807 ) (937 ) Net operating loss carryforwards 21,977 21,957 25,534 25,435 Valuation allowance (25,534 ) (25,208 ) Net deferred tax assets $ — $ 227 Deferred tax assets in 2015 relate to the Company’s former DSIT subsidiary. Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets and liabilities of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company eliminated these deferred tax assets as part of the deconsolidation of DSIT. Valuation allowances relate principally to net operating loss carryforwards related to the Company's consolidated tax losses as well as state tax losses related the Company's OmniMetrix subsidiary and book-tax differences related asset impairments and stock compensation expense of the Company. During the year ended December 31, 2016, the valuation allowance increased by $326. (d) Summary of Tax Loss Carryforwards As of December 31, 2016, the Company had various net operating loss carryforwards expiring as follows: Expiration Federal* State 2023 - 2029 $ 503 — 2030 - 2036 61,692 13,000 Total $ 62,195 13,000 * The utilization of a portion of these net operating loss carryforwards is limited due to limits on utilizing net operating loss carryforwards under Internal Revenue Service regulations following a change in control. (e) Taxation in the United States On October 22, 2004, The American Jobs Creation Act (the “Act”) was signed into law. The Act includes a deduction of 85% of certain foreign earnings that are repatriated, as defined in the Act. The Company’s foreign earnings were derived from the Company’s DSIT subsidiary up to the date of the DSIT Transaction (see Note 3). As a holding company without other business activity in Delaware, the Company is exempt from Delaware state income tax. Thus, the Company’s statutory income tax rate on domestic earnings is the federal rate of 34%. (f) Uncertain Tax Positions (UTP) As of December 31, 2015 and 2016, no interest or penalties were accrued on the balance sheet related to UTP. During the years ending December 31, 2015 and 2016, the Company had no changes in unrecognized tax benefits or associated interest and penalties as a result of tax positions made during the current or prior periods with respect to its continuing or discontinued operations. The Company is subject to U.S. Federal and state income tax. As of January 1, 2017, the Company is no longer subject to examination by U.S. Federal taxing authorities for years before 2013, for years before 2012 for state income taxes. During 2014, the Company’s U.S. Federal income tax returns for the years ended December 31, 2011 through December 31, 2012 were examined by the IRS. No material adjustments were made by the IRS in the course of their audit. |
Related Party Balances and Tran
Related Party Balances and Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Balances and Transactions | NOTE 19—RELATED PARTY BALANCES AND TRANSACTIONS The Company recorded consulting and other fees to directors of $101 and $160 for each of the years ended December 31, 2016 and 2015, respectively, all of which are included in Selling, general and administrative expenses. In January 2016, the Company borrowed a total of $300 ($200 from one director and $100 from another director) under promissory notes which were to mature three days following the receipt of proceeds from the closing of the DSIT Transaction. In March 2016, the Company borrowed, on similar terms, an additional $75 from another director. Upon maturity, the Company was to pay to each director a single payment equal to 115% of the amounts borrowed under the promissory notes. Under the terms of each promissory note, at maturity, the lender could elect to convert the entire amount due under the promissory note into Common Stock of the Company at a conversion price equal to the closing price of the Company’s Common Stock on the trading day immediately preceding the maturity date of the loan. On April 29, 2016, following the receipt of the net proceeds from the DSIT Transaction (see Note 3), the Company repaid in full $275 ($200 from one director and $75 from a another director) of the principal amount of the promissory notes plus interest equal to 15% of the amounts borrowed under the promissory notes. In addition, a third director who had lent the Company $100, elected to convert the principal and the $15 of interest due into Common Stock of the Company. In accordance with the terms of the promissory note, the director received 465,587 shares of Common Stock of the Company. See Note 6 for information related to the sale of OmniMetrix Preferred Stock to one of the Company’s directors and a loan from the director to OmniMetrix. See Note 16(e) for information related to options and stock awards to directors and officers. See Note 22 for director loans made in February 2017. |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting and Geographic Information | NOTE 20—SEGMENT REPORTING AND GEOGRAPHIC INFORMATION (a) General Information As of December 31, 2016, the Company 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, provides 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. Previously, the Company reported GridSense’s activities in its Smart Grid Distribution Automation segment which developed and produced fiber optic sensing systems for the energy and security markets. With the suspension of operations at GridSense (see Note 4(a)), its activities are reflected as discontinued operations. The Company’s reportable segments are strategic business units, offering different products and services and are managed separately as each business requires different technology and marketing strategies. (b) Information about Profit or Loss and Assets The accounting policies of all the segments are those described in the summary of significant accounting policies. The Company evaluates performance based on net income or loss before taxes. The Company does not systematically allocate assets to the divisions of the subsidiaries constituting its consolidated group, unless the division constitutes a significant operation. Accordingly, where a division of a subsidiary constitutes a segment that does not meet the quantitative thresholds of applicable accounting principles, depreciation expense is recorded against the operations of such segment, without allocating the related depreciable assets to that segment. However, where a division of a subsidiary constitutes a segment that does meet the quantitative thresholds, related depreciable assets, along with other identifiable assets, are allocated to such division. The following tables represent segmented data for the years ended December 31, 2016 and 2015: PG CP Energy & Security Sonar Systems* Other* Total Year ended December 31, 2016: Revenues from external customers $ 2,903 $ 682 $ 4,620 $ 454 $ 8,659 Intersegment revenues — — — — — Segment gross profit 1,516 378 1,517 114 3,525 Depreciation and amortization 65 15 53 10 143 Segment income (loss) before income taxes (848 ) (352 ) 82 (10 ) (1,128 ) Segment assets 1,673 879 — — 2,552 Expenditures for segment assets — — 30 3 33 Year ended December 31, 2015: Revenues from external customers $ 2,513 $ 534 $ 12,093 $ 1,408 $ 16,548 Intersegment revenues — — — — — Segment gross profit 1,472 319 3,834 542 6,167 Depreciation and amortization 70 15 185 27 297 Segment income (loss) before income taxes (1,437 ) (116 ) (195 ) 220 (1,528 ) Segment assets 1,691 298 15,777 440 18,206 Expenditures for segment assets — — 114 18 132 (c) The following tables represent a reconciliation of the segment data to consolidated statement of operations and balance sheet data for the years ended and as of December 31, 2016 and 2015: Year ended December 31, 2016 2015 Total net loss before income taxes for reportable segments $ (1,118 ) $ (1,748 ) Other operational segment net income (loss) before income taxes (10 ) 220 Segment loss before income taxes (1,128 ) (1,528 ) Gain on sale of interest in DSIT, net of transaction costs 3,543 -- Unallocated net income (cost) of DSIT headquarters* (6 ) 120 Unallocated net cost of corporate headquarters** (2,491 ) (4,089 ) Consolidated net loss before taxes on income $ (82 ) $ (5,497 ) * Results for the year ended December 31, 2016, only include DSIT’s results for the period January 1, 2016 to April 21, 2016. See Note 3. ** Includes $89 and $582 of stock compensation expense for the years ended December 31, 2016 and 2015, respectively. Also includes $446 and $225 of interest expense associated with the LT Loan for the years ended December 31, 2016 and 2015, respectively (see Note 5). As of December 31, 2016 2015 Assets: Total assets for reportable segments $ 2,552 $ 17,765 Total assets of other operational segment — 441 Assets of discontinued operations 119 1,108 Unallocated assets of DSIT headquarters — 4,367 Unallocated assets of OmniMetrix headquarters 213 397 Assets of corporate headquarters * 6,356 252 Total consolidated assets $ 9,240 $ 24,330 * Includes the investment in DSIT of $5,658 and the escrow deposit of $579 from the DSIT Transaction at December 31, 2016. Other Significant Items Segment Totals Adjustments Consolidated Totals Year ended December 31, 2016 Depreciation and amortization $ 143 $ 3 $ 146 Expenditures for assets 33 — 33 Year ended December 31, 2015 Depreciation and amortization $ 297 $ 17 $ 314 Expenditures for assets 132 27 159 Other adjustments are primarily unallocated DSIT and corporate headquarters data which are not included in the segment information. None of the other adjustments are significant. Year ended December 31, 2016 2015 Revenues based on location of customer: United States $ 3,550 $ 3,019 Israel 3,061 7,699 Asia 2,013 5,587 Other 35 243 $ 8,659 $ 16,548 December 31, 2016 2015 Long-lived assets located in the following countries: United States $ 214 $ 299 Israel — 655 $ 214 $ 954 (d) Revenues, Accounts Receivable and Unbilled Revenue Balances from Major Customers Customers A – G are all related to DSIT’s Energy & Security Sonar Solutions segment. Customer G is related to OmniMetrix’s CP segment. Revenue Accounts Receivable** Unbilled Revenue** 2016 2015 2016 2015 2015 Customer Balance % Balance % Balance % Balance % Balance % A $ 1,828 21 % $ 2,701 14 % * * * * * * B $ * * $ 2,735 14 % * * $ 1,844 28 % $ 1,507 39 % C * * $ 2,889 15 % * * $ 1,049 16 % 1,087 28 % D $ 1,295 15 % $ 2,200 12 % * * $ 834 12 % $ * * E * * * * * * $ 1,112 17 % $ * * F * * * * * * * * 408 11 % G * * * * $ 283 28 % * * $ * * * Balance is not significant ** Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT’s Accounts Receivable or Unbilled Revenue balances. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 21—FAIR VALUE MEASUREMENTS Financial items measured at fair value are classified in the table below in accordance with the hierarchy established in applicable accounting principles. As at December 31, 2016 Level 1 Level 2 Level 3 Total Escrow deposits – continuing operations $ 579 — — $ 579 Escrow deposits – discontinued operations 100 — — 100 Total $ 679 $ — $ — $ 679 As at December 31, 2015 Level 1 Level 2 Level 3 Total Restricted deposits – current $ 2,172 — — $ 2,172 Restricted deposits –non-current 2,951 — — 2,951 Derivative liabilities (4 ) — — (4 ) Total $ 5,119 $ — $ — $ 5,119 Escrow deposits – continuing operations relate to escrow requirements from the DSIT Transaction (see Note 3). Restricted deposits (both current and non-current) and derivative liabilities at December 31, 2015 were all related to DSIT. Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company eliminated these financial items as part of the deconsolidation of DSIT. See Note 3 for the determination of the fair value of the Company’s equity investment in DSIT. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 22—SUBSEQUENT EVENTS On February 16, 2017, the Company secured commitments for $1,900 in funding in the form of loans from members of the Company's Board of Directors, including $900 immediately funded. Acorn expects to repay the loans, which mature at the end of April 2018 and accrue interest at the rate of 12.5% (16.5% after February 15, 2018) per annum, payable at maturity, with proceeds from a future sale of its 41.2% ownership in its DSIT Solutions Ltd. affiliate. In addition to the $900 already funded, one of the Company’s directors agreed to loan up to an additional $1,000 to the Company on or after July 7, 2017 on substantially identical terms as the currently funded loans. The amount of any such additional financing would be reduced to the extent that other additional liquidity is provided to the Company in the form of loans from the directors or other lenders with a maturity date no earlier than April 2018, or from any net proceeds from the sale by the Company of any of its DSIT shares. The Company is required to apply the net proceeds from the sale of any of its DSIT shares in repayment of the principal of the directors’ loans and all interest accrued. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Presentation | Principles of Consolidation and Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. In these consolidated financial statements, “subsidiaries” are companies that are over 50% controlled, the accounts of which are consolidated with those of the Company. Significant intercompany transactions and balances are eliminated in consolidation; profits from intercompany sales, are also eliminated; non-controlling interests are included in equity. When the Company does not have a controlling interest in an entity, but exerts significant influence over the entity’s operating and financial decisions, the Company applies the equity method of accounting in which it records in earnings its share of income or losses of the entity. On April 21, 2016 (the “Closing Date”), the Company closed on a transaction (the “DSIT Transaction”) initially entered into on January 28, 2016 for the sale of a portion of its interests DSIT Solutions, Ltd. business to Rafael Advanced Defense Systems Ltd. (“Rafael”), a major Israeli defense company (see Note 3). As a result of the DSIT Transaction, the Company’s holdings in DSIT were reduced from 78.7% to 41.2%, and subsequent to the DSIT Transaction, the Company has limited representation on the DSIT Board of directors. Accordingly, after the Closing Date, the Company no longer consolidates the results of DSIT. |
Discontinued Operations | Discontinued Operations In April 2016, the Company announced that it decided to cease operations of its GridSense subsidiary and initiate the liquidation of the GridSense assets. Following the decision to cease GridSense operations, the Company wrote down all GridSense assets to their estimated realizable values at the time and accrued for estimated severance costs and lease commitments. As a result of this decision, GridSense is reported as a discontinued operation in its consolidated financial statements for all periods presented (see Note 4(a)). In March 2015, the Company announced that it stopped funding USSI and that USSI had effectively suspended operations and terminated substantially all employees. On September 28, 2015, the Board of Directors of USSI approved a motion to file a voluntary petition for protection under Chapter 7 of the United States Bankruptcy Code (a “Chapter 7 Bankruptcy”). On September 30, 2015, USSI filed for a Chapter 7 Bankruptcy. Accordingly, effective September 30, 2015, the Company no longer consolidates the assets, liabilities or operating results of USSI (see Note 4(b)). |
Functional Currency and Foreign Currency Transactions | Functional Currency and Foreign Currency Transactions The currency of the primary economic environment in which the operations of Acorn and its U.S. subsidiaries are conducted is the United States dollar (“dollar”). Accordingly, the Company and all of its U.S. subsidiaries use the dollar as their functional currency. The financial statements of DSIT whose functional currency is the New Israeli Shekel (“NIS”) have been translated in accordance with applicable accounting principles. Assets and liabilities are translated at year-end exchange rates, while revenues and expenses are translated at average exchange rates during the year. Differences resulting from translation are presented in equity as Accumulated Other Comprehensive Income. Gains and losses on foreign currency transactions and exchange gains and losses denominated in non-functional currencies are reflected in finance income (expense), net, in the Consolidated Statements of Operations when they arise. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid investments, which include money market funds and short-term bank deposits (up to three months from date of deposit or with maturity of three months from date of purchase) that are not restricted as to withdrawal or use, to be cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable consists of trade receivables. Trade receivables are recorded at the invoiced amount. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. This allowance is based on specific customer account reviews and historical collections experience. If the financial condition of the Company’s funding parties or customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Company performs ongoing credit evaluations of its customers and does not require collateral. During the years ended December 31, 2016 and 2015, $28 and $44 was charged to expense, respectively. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the operating results of DSIT. At December 31, 2016 and 2015, the balance in allowance for doubtful accounts was $11 and $20, respectively. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the allowance for doubtful accounts of DSIT. |
Inventory | Inventory Inventories are comprised of components (raw materials), work-in-process and finished goods, which are measured at the lower of cost or market. OmniMetrix - Raw materials inventory is generally comprised of radios, cables, antennas, and electrical components. Finished goods inventory consists of fully assembled systems ready for final shipment to the customer. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and applicable shipping costs. DSIT - Raw materials inventory is comprised of arrays and receivers related to diver detection sonar (“DDS”) and portable diver detection sonar (“PDDS”) systems. Work-in-process inventory is primarily comprised of PDDS systems that have commenced with assembly as well as capitalized labor and overhead. Costs are determined at cost of acquisition on a weighted average basis and include all outside production and shipping costs. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the inventory of DSIT. All inventories are periodically reviewed for impairment related to slow-moving and obsolete inventory. |
Non-Controlling Interests | Non-Controlling Interests The Financial Accounting Standards Board (“FASB”) requires that non-controlling interests be reported as a component of equity, changes in a parent’s ownership interest while the parent retains its controlling interest be accounted for as equity transactions, and upon a loss of control, retained ownership interest be re-measured at fair value, with any gain or loss recognized in earnings. The Company attributes income and losses to the non-controlling interests associated with DSIT (up to the DSIT Transaction – see Note 3), OmniMetrix and USSI (up through its deconsolidation in September 2015 – See Note 4(b)). |
Property and Equipment | Property and Equipment Property and equipment are presented at cost at the date of acquisition. Depreciation and amortization is calculated based on the straight-line method over the estimated useful lives of the depreciable assets, or in the case of leasehold improvements, the shorter of the lease term or the estimated useful life of the asset, a portion of which is allocated to cost of sales. Improvements are capitalized while repairs and maintenance are charged to operations as incurred. |
Goodwill | Goodwill The Company assesses annually whether there is an indication that goodwill is impaired, or more frequently if events and circumstances indicate that the asset might be impaired during the year. The Company performs its annual impairment test in the fourth quarter of each year. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The Company identified its operating segments as its reporting units for purposes of the impairment test. The Company’s goodwill at December 31, 2015 was associated with its Energy & Security Sonar Solutions segment. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company eliminated this goodwill as part of the deconsolidation of DSIT. |
Treasury Stock | Treasury Stock Shares of common stock repurchased are recorded at cost as treasury stock. When shares are reissued, the cost method is used for determining cost. In accordance with GAAP, the excess of the acquisition cost over the reissuance price of the treasury stock, if any, is charged to additional paid-in capital, limited to the amount previously credited to additional paid-in capital, if any. Any excess is charged to accumulated deficit. |
Revenue Recognition | Revenue Recognition The Company’s revenue recognition policy is consistent with applicable revenue recognition guidance and interpretations. The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the price is fixed or determinable, and collectability is reasonably assured. The Company assesses whether payment terms are customary or extended in accordance with normal practice relative to the market in which the sale is occurring. The Company’s sales arrangements generally include standard payment terms. These terms effectively relate to all customers, products, and arrangements regardless of customer type, product mix or arrangement size. If revenue recognition criteria are not satisfied, amounts received from customers are classified as deferred revenue on the balance sheet until such time as the revenue recognition criteria are met. Sales of OmniMetrix monitoring systems have multiple elements which include the sale of equipment and of monitoring services. Sales of OmniMetrix equipment do not qualify as a separate unit of accounting. As a result, revenues (and related costs) associated with sale of equipment are recorded to deferred revenue (and deferred charges) upon shipment for PG and CP units. Revenue and related costs with respect to the sale of equipment are recognized over the estimated life of the customer relationship which is estimated to be 24 months. Revenues from the prepayment of monitoring fees (generally paid 12 months in advance) are initially recorded as deferred revenue upon receipt of payment from the customer and then amortized to revenue over the monitoring service period. Revenue from fixed-price contracts at DSIT which require significant production, modification and/or customization to customer specifications are recognized using the percentage-of-completion method. Percentage-of-completion estimates are in man-months of labor and are reviewed periodically, and any adjustments required are reflected in the period when such estimates are revised. Losses on contracts, if any, are recognized in the period in which the loss is determined. Revenue from DSIT’s consulting, time-and-materials service contracts, maintenance agreements and other services are recognized as services are provided. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the revenue of DSIT. |
Unbilled Revenue | Unbilled Revenue Revenue may be earned by DSIT for those services in advance of amounts billable to the customer and are recognized when the service is performed. Revenues recognized in excess of amounts billed for projects in process are recorded as unbilled revenue. Such amounts are generally billed upon the completion of a project milestone. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the unbilled revenue of DSIT. |
Warranty Provision | Warranty Provision The Company’s OmniMetrix subsidiary generally grants their customers a one-year warranty on their respective products. DSIT generally grants its customers a one-to-two-year warranty on its projects. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the warranty provision of DSIT. Estimated warranty obligations are provided for as a cost of sales in the period in which the related revenues are recognized, based on management’s estimate of future potential warranty obligations and limited historical experience. Adjustments are made to accruals as warranty claim data and historical experience warrant. The Company’s warranty obligations may be materially affected by product or service failure rates and other costs incurred in correcting a product or service failure. Should actual product or service failure rates or other related costs differ from the Company’s estimates, revisions to the accrued warranty liability would be required. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, escrow deposits and trade accounts receivable. The Company’s cash, cash equivalents and escrow deposits were deposited primarily with U.S. banks and brokerage firms and amounted to $801 at December 31, 2016. The Company does not believe there is significant risk of non-performance by these counterparties. See Note 20(d) with respect to revenue from significant customers and concentrations of trade accounts receivables and unbilled revenue. |
Financial Instruments | Financial Instruments Fair values of financial instruments included in current assets and current liabilities are estimated to approximate their book values, due to the short maturity of such instruments. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist primarily of labor and related expenses and are charged to operations as incurred. Participation by third parties in the Company’s research and development costs as well as credits arising from qualifying research and experimental development expenditures are netted against research and development. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the research and development expenses of DSIT. |
Advertising Expenses | Advertising Expenses Advertising expenses are charged to operations as incurred. Advertising expense was $9 and $20 for each of the years ended December 31, 2016 and 2015, respectively. Following the DSIT Transaction (see Note 3), the Company no longer consolidates the advertising expenses of DSIT. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, we recognize expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. See Note 16(d) for the assumptions used to calculate the fair value of stock-based employee compensation. Upon the exercise of options, it is the Company’s policy to issue new shares rather than utilizing treasury shares. |
Deferred Income Taxes | Deferred Income Taxes Deferred income taxes reflects the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are classified as current or non-current based on the classification of the related assets or liabilities for financial reporting, or according to the expected reversal dates of the specific temporary differences, if not related to an asset or liability for financial reporting. Valuation allowances are established against deferred tax assets if it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in operations in the period that includes the enactment date. At December 31, 2015, U.S. income taxes were not provided on undistributed earnings of the Company’s then DSIT subsidiary because such earnings were reinvested in foreign operations. If those earnings were repatriated to the U.S., the Company would not expect to owe additional U.S. income taxes due to the utilization of net operating loss carryovers. |
Income Tax Uncertainties | Income Tax Uncertainties The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on the two-step process prescribed by applicable accounting principles. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires the Company to estimate and measure the tax benefit as the largest amount that is more likely than not being realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as this requires the Company to determine the probability of various possible outcomes. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period. The Company recognizes interest and penalties as incurred in finance income (expense), net in the Consolidated Statements of Operations. |
Basic and Diluted Net Income (Loss) Per Share | Basic and Diluted Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) attributable to Acorn Energy, Inc. by the weighted average number of shares outstanding during the year, excluding treasury stock. Diluted net income (loss) per share is computed by dividing the net income (loss) 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 4,904,000 and 5,001,000 for the years ending December 31, 2016 and 2015, respectively. The following data represents the amounts used in computing EPS and the effect on net income and the weighted average number of shares of dilutive potential common stock: Year ended December 31, 2016 2015 Net income (loss) available to common stockholders $ 145 $ (10,599 ) Weighted average shares outstanding: -Basic 28,488 26,803 Add: Warrants 24 — Add: Stock options 19 — -Diluted 28,531 26,803 Basic and diluted net income (loss) per share $ 0.01 $ (0.40 ) |
Fair Value Measurement | Fair Value Measurement The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. See Notes 16, 21 and 22. |
Recently Issued Accounting Principles | Recently Issued Accounting Principles Other than the announcement noted below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the year ended December 31, 2016, that are of material significance, or have potential material significance, to the Company. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with adjustment of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The FASB issued several subsequent standards in 2016 containing implementation guidance related to the new standard. These standards provide additional guidance related to principal versus agent considerations, licensing, and identifying performance obligations. Additionally, these standards provide narrow-scope improvements and practical expedients as well as technical corrections and improvements. Overall, the new guidance is to be effective for the fiscal year beginning after December 15, 2017. Companies are able to early adopt the pronouncement, however not before fiscal years beginning after December 15, 2016. The Company currently anticipates that it will adopt this standard using the modified retrospective method. The Company is creating an implementation team to provide training and to review contracts to assess the impact, if any, the new revenue standard will have on its consolidated financial statements. The Company is monitoring for any additional implementation or other guidance that may be issued in 2017 with respect to the new revenue standard and adjust its assessment and implementation plans accordingly. In August 2014, the FASB issued ASU No. 2014-15 —Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued and if management’s plans will alleviate that doubt. Management will be required to make this evaluation for both annual and interim reporting periods. The Company adopted this guidance for the fiscal year ended December 31, 2016. This adoption did not have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This accounting standard that requires inventory be measured at the lower of cost and net realizable value and options that currently exist for measuring inventory at market value be eliminated. The standard defines net realizable value as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation and is effective for reporting periods beginning after December 15, 2016 and interim periods within those fiscal years with early adoption permitted. The guidance should be applied prospectively. The Company is evaluating the impact the adoption of this guidance will have on the determination or reporting of its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” which simplifies the balance sheet classification of deferred taxes. The new guidance requires that all deferred taxes be presented as noncurrent, rather than separated into current and noncurrent amounts. The guidance is effective for reporting periods beginning after December 15, 2016 and early adoption is permitted. In addition, the adoption of guidance can be applied either prospectively or retrospectively to all periods presented. The Company does not believe that this new accounting pronouncement will have a material impact on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01 “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. ASU 2016-01 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted under certain circumstances.” The Company is currently assessing the impact of ASU 2016-01 on its financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, which is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 with early adoption permitted. Under Accounting Standards Update 2016-02, lessees will be required to recognize for all leases at the commencement date a lease liability, which is a lessee’s obligation to make lease payments arising from a lease measured on a discounted basis, and a right-to-use asset, which is an asset that represents the lessee’s right to use or control the use of a specified asset for the lease term. The Company is currently evaluating the effect that the new guidance will have on its financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which includes multiple provisions intended to simplify various aspects of the accounting for share-based payments, including treatment of excess tax benefits and forfeitures, as well as consideration of minimum statutory tax withholding requirements. The ASU will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early application permitted in any interim or annual period. The Company is evaluating the future impact of this ASU on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15 Cash Flow Statement (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. This new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice, including: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, and is not expected to have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash a consensus of the FASB Emerging Issues Task Force. This new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019 and is not expected to have a material impact on the Company’s consolidated financial statements. |
Reclassifications | Reclassifications Certain reclassifications have been made to the Company’s prior year’s consolidated financial statements to conform to the current year’s consolidated financial statement presentation. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Effect on Net Income and Weighted Average Number of Shares | The following data represents the amounts used in computing EPS and the effect on net income and the weighted average number of shares of dilutive potential common stock: Year ended December 31, 2016 2015 Net income (loss) available to common stockholders $ 145 $ (10,599 ) Weighted average shares outstanding: -Basic 28,488 26,803 Add: Warrants 24 — Add: Stock options 19 — -Diluted 28,531 26,803 Basic and diluted net income (loss) per share $ 0.01 $ (0.40 ) |
DSIT Solutions, Ltd. ('DSIT') (
DSIT Solutions, Ltd. ('DSIT') (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Dsit Solutions Ltd. Dsit | |
Schedule of Assets and Liabilities | Assets and liabilities related to the deconsolidated operations of DSIT are as follows: December 31, 2016 At the Closing Date December 31, 2015 (unaudited) (unaudited) (unaudited) Current assets: Cash and cash equivalents $ 1,047 $ 516 7 Restricted deposits 2,648 2,517 2,172 Accounts receivable 2,825 5,166 5,826 Unbilled revenue 4,918 4,779 3,849 Inventory 481 297 230 Other current assets 795 935 698 Total current assets 12,714 14,210 12,782 Property and equipment, net 569 620 654 Severance assets 3,915 3,762 3,558 Restricted deposits 646 1,815 2,951 Due from Acorn 1,171 916 802 Goodwill — 536 516 Other assets 339 80 124 Total assets $ 19,354 $ 21,939 21,387 Current liabilities: Short-term bank credit and current maturities of long-term bank debt $ 1,239 $ 2,655 1,917 Accounts payable 1,461 2,072 1,869 Accrued payroll, payroll taxes and social benefits 1,142 1,286 1,261 Deferred revenue 431 2,219 3,487 Other current liabilities 2,736 1,615 1,417 Total current liabilities 7,009 9,847 9,951 Accrued severance 5,374 5,209 4,984 Other long-term liabilities 9 38 82 Total liabilities $ 12,392 $ 15,094 15,017 |
DSIT Results Included in the Company's Consolidated Statements of Operations | DSIT’s results that were included in the Company’s Consolidated Statements of Operations for the period from January 1, 2016 until the closing of the DSIT Transaction and for the year ended December 31, 2015 can be seen below: January 1, 2016 – April 21, 2016 Year ended December 31, 2015 (unaudited) (unaudited) Revenue $ 5,074 $ 13,501 Cost of sales 3,443 9,125 Gross profit 1,631 4,376 Research and development expenses, net 469 1,191 Selling, general and administrative expenses 1,063 3,162 Operating income 99 23 Finance expense, net (39 ) (112 ) Income before income taxes 60 (89 ) Income tax expense (19 ) (259 ) Net income 41 (348 ) Net income attributable to non-controlling interests (9 ) 49 Net loss attributable to Acorn Energy Inc. $ 32 $ (299 ) DSIT’s results and the Company’s share of its net income for the period from the Closing Date to December 31, 2016 can be seen below: (unaudited) Revenue $ 11,777 Cost of sales 7,795 Gross profit 3,982 Research and development expenses, net 642 Selling, general and administrative expenses 2,721 Operating income 619 Finance expense, net (134 ) Income before income taxes 485 Income tax benefit 169 Net income $ 654 Acorn’s share of net income in DSIT $ 268 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
GridSense's Operations [Member] | |
Schedule of Assets and Liabilities Related to Discontinued Operations | Assets and liabilities related to the discontinued operations of GridSense are as follows: As of December 31, 2016 December 31, 2015 Cash $ 19 $ 48 Other current assets and non-current assets 100 1,060 Total assets $ 119 $ 1,108 Short-term bank credit $ — $ 138 Accounts payable 501 950 Accrued payroll, payroll taxes and social benefits 90 186 Other current and non-current liabilities 406 572 Total liabilities $ 997 $ 1,846 |
Schedule of Financial Information | Selected financial information for GridSense’s operations for those periods are presented below: Year ended December 31, 2016 2015 Revenue $ 212 $ 2,507 Gross profit $ 28 $ 21 Net loss $ (286 ) $ (3,923 ) |
USSI's Operations [Member] | |
Schedule of Assets and Liabilities Related to Discontinued Operations | Assets and liabilities related to the discontinued operations of USSI were as follows: At September 29, 2015 – prior to deconsolidation Cash and cash equivalents $ — Other current assets — Total assets $ — Short-term bank credit $ 999 Accounts payable 1,029 Accrued payroll, payroll taxes and social benefits 90 Other current liabilities 1,721 Total liabilities $ 3,839 |
Schedule of Financial Information | Summarized financial information for USSI’s operations for the period is presented below: Year ended December 31,2015 Revenues $ 163 Gross profit $ (68 ) Net loss $ (772 ) Loss on deconsolidation $ (401 ) Loss from discontinued operations, net of income taxes $ (1,173 ) |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | As of December 31, 2016 2015 Raw materials $ 156 $ 287 Work-in-process — 189 Finished goods 46 30 $ 202 $ 506 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Current Assets | |
Schedule of Other Current Assets | Other current assets consist of the following: As of December 31, 2016 2015 Prepaid expenses and deposits $ 83 $ 260 Deferred costs 829 813 Deferred taxes — 141 Funded severance assets — 51 Employee advances 2 105 R&D participation receivable — 168 Other 18 95 $ 932 $ 1,633 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following: Estimated Useful Life As of December 31, (in years) 2016 2015 Cost: Computer hardware and software 3 - 5 $ 78 $ 1,296 Equipment 7 218 854 Leasehold improvements Term of lease 339 900 635 3,050 Accumulated depreciation and amortization Computer hardware and software 61 1,202 Equipment 159 347 Leasehold improvements 201 547 421 2,096 Property and equipment, net $ 214 $ 954 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amounts of Goodwill by Segment | The changes in the carrying amounts of goodwill by segment from December 31, 2014 to December 31, 2016 were as follows: Energy & Security Sonar Solutions segment Balance at December 31, 2014 $ 518 Impairment — Translation adjustment (2 ) Balance at December 31, 2015 516 Translation adjustment 20 Deconsolidation of DSIT (536 ) Balance at December 31, 2016 $ — |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of December 31, 2016 2015 DSIT line-of-credit $ — $ 979 DSIT borrowings against receivables — 862 Current maturities of long-term debt — 75 OmniMetrix borrowings against receivables 376 — Total debt $ 376 $ 1,916 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Components of Other Current Liabilities | Other current liabilities consist of the following: As of December 31, 2016 2015 Accrued expenses $ 518 $ 2,081 Taxes 38 12 Warranty provision 27 122 Restructuring liabilities 46 45 $ 629 $ 2,260 |
Accrued Severance, Severance 40
Accrued Severance, Severance Assets and Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Breakdown of Company's Severance Liability and Severance Assets | As of December 31, 2016 2015 Current severance liability (included in Accrued payroll, payroll taxes and social benefits) $ 279 $ 41 Non-current severance liability — 4,984 Total severance liability $ 279 $ 5,025 Current severance assets (included in Other current assets) $ — $ 51 Non-current severance assets — 3,558 Total severance assets $ — $ 3,609 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments on Non-Cancelable Operating Leases | Future minimum lease payments on non-cancelable operating leases as of December 31, 2016 are as follows: Years ending December 31, 2017 $ 107 2018 110 2019 109 2020 — 2021 and thereafter — $ 326 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Stock Options Fair Value Assumptions Estimated Using Black-Scholes Pricing Model | The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages): 2016 2015 Risk-free interest rate 1.5 % 2.1 % Expected term of options, in years 6.5 8.6 Expected annual volatility 80 % 63 % Expected dividend yield — % — % Determined weighted average grant date fair value per option $ 0.11 $ 0.51 |
Summary of Stock Option Plans | A summary of the Company’s option plans as of December 31, 2016 and 2015, as well as changes during each of the years then ended, is presented below: 2016 2015 Number of Options (in shares) Weighted Average Exercise Price Number of Options (in shares) Weighted Average Exercise Price Outstanding at beginning of year 2,364,918 $ 3.51 1,812,428 $ 4.51 Granted at market price 65,000 0.15 687,654 0.75 Exercised — — — — Forfeited or expired (379,549 ) 2.29 (135,164 ) 2.91 Outstanding at end of year 2,050,369 3.62 2,364,918 3.51 Exercisable at end of year 2,004,534 $ 3.69 1,778,503 $ 4.16 |
Summary of Information Regarding to Options Outstanding and Exercisable | Summary information regarding the options outstanding and exercisable at December 31, 2016 is as follows: Outstanding Exercisable Range of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price (in shares) (in years) (in shares) $0.14 – $1.06 677,301 5.8 $ 0.74 644,800 $ 0.76 $1.68 – $2.49 307,985 4.7 $ 1.74 294,651 $ 1.75 $3.51 – $5.00 279,368 3.5 $ 4.22 279,368 $ 4.22 $5.05 – $5.91 320,000 1.4 $ 5.21 320,000 $ 5.21 $6.31 - $7.57 302,356 3.2 $ 6.90 302,356 $ 6.97 $7.60 - $11.42 163,359 2.8 $ 8.82 163,359 $ 8.82 2,050,369 2,004,534 |
Stock-Based Compensation Expense Included in Statements of Operations | Stock-based compensation expense included in the Company’s Consolidated Statements of Operations was: Year ended December 31, 2016 2015 Cost of sales* $ — $ 16 Research and development expense* — 4 Selling, general and administrative expense* 89 641 Total $ 89 $ 661 * Includes $16, $4 and $59 in Cost of sales, Research and development expense and Selling, general and administrative expense, respectively, for the year ended December 31, 2015 with respect to DSIT. See Note 4 with respect to stock-based compensation expense associated with discontinued operations. |
Summary Status of DSIT Plan | A summary status of the DSIT Plan as of December 31, 2016 and 2015, as well as changes during the years then ended, is presented below: 2016 2015 Number of Options (in shares)* Weighted Average Exercise Price Number of Options (in shares)* Weighted Average Exercise Price Outstanding at beginning of year 239,524 $ 1.65 239,524 $ 1.67 Granted at fair value — $ — — $ — Exercised (239,524 ) $ 1.63 — $ — Forfeited — $ — — $ — Outstanding at end of year — $ — 239,524 $ 1.65 Exercisable at end of year — $ — 239,524 $ 1.65 *The exercise price of 91,754 of these options was NIS 9.38 translated to US dollars using following exchange rates: NIS 3.89 for December 31, 2014, NIS 3.90 for December 31, 2015, and 3.97 for the Closing Date. |
Summary of Warrant Activity | The Company has issued warrants at exercise prices equal to or greater than market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows: 2016 2015 Number of shares underlying warrants Weighted Average Exercise Price Number of shares underlying warrants Weighted Average Exercise Price Outstanding at beginning of year 2,619,423 $ 1.48 2,642,423 $ 1.50 Granted 35,000 $ 0.13 — — Exercised — — — — Forfeited or expired — — (23,000 ) $ 3.68 Outstanding and exercisable at end of year 2,654,423 $ 1.46 2,619,423 $ 1.48 |
Schedule of Warrant Fair Value Assumptions Estimated Using Black-Scholes Pricing Model | The fair value of the warrants granted ($0.08 per warrant) was estimated on the grant dates using the Black-Scholes option-pricing model with the following weighted average assumptions: Risk-free interest rate 1.79 % Expected term of warrants 7.0 years Expected annual volatility 78 % Expected dividend yield — % |
Finance Income (Expense), Net (
Finance Income (Expense), Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Finance Income Expense Net | |
Schedule of Finance Income (Expense), Net | Finance income (expense), net consists of the following: Year ended December 31, 2016 2015 Interest income $ 1 $ 26 Interest expense* (604 ) (420 ) Exchange gain, net 31 67 $ (572 ) $ (327 ) * Interest expense includes $446 and $225 associated with the LT Loan in 2016 and 2015, respectively (see Note 5). |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Composition of Loss from Continuing Operations before Income Taxes | (a) Composition of income (loss) from continuing operations before income taxes is as follows: Year ended December 31, 2016 2015 Domestic $ (142 ) $ (5,409 ) Foreign 60 (88 ) $ (82 ) $ (5,497 ) |
Components of Income Tax Expense (Benefit) | Income tax expense (benefit) consists of the following: Year ended December 31, 2016 2015 Current: Federal $ — $ — State and local — — Foreign — (50 ) — (50 ) Deferred: Federal — — State and local — — Foreign 19 259 19 259 Total income tax expense $ 19 $ 209 |
Summary of Reconciliation Between Federal Tax Rate | Set forth below is a reconciliation between the federal tax rate and the Company’s effective income tax rates with respect to continuing operations: Year ended December 31, 2016 2015 Statutory Federal rates 34 % 34 % Increase (decrease) in income tax rate resulting from: Tax on foreign activities (2 ) 6 Other, net (primarily permanent differences) (200 ) (4 ) Valuation allowance 145 (40 ) Effective income tax rates (23 )% (4 )% |
Schedule of Deferred Tax Assets and Liabilities | As of December 31, 2016 2015 Deferred tax assets (liabilities) consist of the following: Employee benefits and deferred compensation $ 1,745 $ 1,722 Investments and asset impairments 2,619 2,693 Other temporary differences (807 ) (937 ) Net operating loss carryforwards 21,977 21,957 25,534 25,435 Valuation allowance (25,534 ) (25,208 ) Net deferred tax assets $ — $ 227 |
Summary of Tax Loss Carryforwards | As of December 31, 2016, the Company had various net operating loss carryforwards expiring as follows: Expiration Federal* State 2023 - 2029 $ 503 — 2030 - 2036 61,692 13,000 Total $ 62,195 13,000 * The utilization of a portion of these net operating loss carryforwards is limited due to limits on utilizing net operating loss carryforwards under Internal Revenue Service regulations following a change in control. |
Segment Reporting and Geograp45
Segment Reporting and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Summary of Segmented Data | The following tables represent segmented data for the years ended December 31, 2016 and 2015: PG CP Energy & Security Sonar Systems* Other* Total Year ended December 31, 2016: Revenues from external customers $ 2,903 $ 682 $ 4,620 $ 454 $ 8,659 Intersegment revenues — — — — — Segment gross profit 1,516 378 1,517 114 3,525 Depreciation and amortization 65 15 53 10 143 Segment income (loss) before income taxes (848 ) (352 ) 82 (10 ) (1,128 ) Segment assets 1,673 879 — — 2,552 Expenditures for segment assets — — 30 3 33 Year ended December 31, 2015: Revenues from external customers $ 2,513 $ 534 $ 12,093 $ 1,408 $ 16,548 Intersegment revenues — — — — — Segment gross profit 1,472 319 3,834 542 6,167 Depreciation and amortization 70 15 185 27 297 Segment income (loss) before income taxes (1,437 ) (116 ) (195 ) 220 (1,528 ) Segment assets 1,691 298 15,777 440 18,206 Expenditures for segment assets — — 114 18 132 |
Schedule of Reconciliation of Segment Data to Consolidated Statement of Operations | The following tables represent a reconciliation of the segment data to consolidated statement of operations and balance sheet data for the years ended and as of December 31, 2016 and 2015: Year ended December 31, 2016 2015 Total net loss before income taxes for reportable segments $ (1,118 ) $ (1,748 ) Other operational segment net income (loss) before income taxes (10 ) 220 Segment loss before income taxes (1,128 ) (1,528 ) Gain on sale of interest in DSIT, net of transaction costs 3,543 -- Unallocated net income (cost) of DSIT headquarters* (6 ) 120 Unallocated net cost of corporate headquarters** (2,491 ) (4,089 ) Consolidated net loss before taxes on income $ (82 ) $ (5,497 ) * Results for the year ended December 31, 2016, only include DSIT’s results for the period January 1, 2016 to April 21, 2016. See Note 3. ** Includes $239 and $582 of stock compensation expense for the years ended December 31, 2016 and 2015, respectively. Also includes $446 and $225 of interest expense associated with the LT Loan for the years ended December 31, 2016 and 2015, respectively (see Note 5). |
Reconciliation of Segment Data to Consolidated Statement Balance Sheet | As of December 31, 2016 2015 Assets: Total assets for reportable segments $ 2,552 $ 17,765 Total assets of other operational segment — 441 Assets of discontinued operations 119 1,108 Unallocated assets of DSIT headquarters — 4,367 Unallocated assets of OmniMetrix headquarters 213 397 Assets of corporate headquarters * 6,356 252 Total consolidated assets $ 9,240 $ 24,330 * Includes the investment in DSIT of $5,658 and the escrow deposit of $579 from the DSIT Transaction at December 31, 2016. |
Reconciliation of Segment Assets - Other Significant Items | Other Significant Items Segment Totals Adjustments Consolidated Totals Year ended December 31, 2016 Depreciation and amortization $ 143 $ 3 $ 146 Expenditures for assets 33 — 33 Year ended December 31, 2015 Depreciation and amortization $ 297 $ 17 $ 314 Expenditures for assets 132 27 159 |
Schedule of Revenue from External Customers by Geographical Areas | Other adjustments are primarily unallocated DSIT and corporate headquarters data which are not included in the segment information. None of the other adjustments are significant. Year ended December 31, 2016 2015 Revenues based on location of customer: United States $ 3,550 $ 3,019 Israel 3,061 7,699 Asia 2,013 5,587 Other 35 243 $ 8,659 $ 16,548 |
Schedule of Long Lived Assets by Geographic Areas | December 31, 2016 2015 Long-lived assets located in the following countries: United States $ 214 $ 299 Israel — 655 $ 214 $ 954 |
Revenues, Accounts Receivable and Unbilled Revenue from Major Customers | Customers A – G are all related to DSIT’s Energy & Security Sonar Solutions segment. Customer G is related to OmniMetrix’s CP segment. Revenue Accounts Receivable** Unbilled Revenue** 2016 2015 2016 2015 2015 Customer Balance % Balance % Balance % Balance % Balance % A $ 1,828 21 % $ 2,701 14 % * * * * * * B $ * * $ 2,735 14 % * * $ 1,844 28 % $ 1,507 39 % C * * $ 2,889 15 % * * $ 1,049 16 % 1,087 28 % D $ 1,295 15 % $ 2,200 12 % * * $ 834 12 % $ * * E * * * * * * $ 1,112 17 % $ * * F * * * * * * * * 408 11 % G * * * * $ 283 28 % * * $ * * * Balance is not significant ** Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT’s Accounts Receivable or Unbilled Revenue balances. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements | Financial items measured at fair value are classified in the table below in accordance with the hierarchy established in applicable accounting principles. As at December 31, 2016 Level 1 Level 2 Level 3 Total Escrow deposits – continuing operations $ 579 — — $ 579 Escrow deposits – discontinued operations 100 — — 100 Total $ 679 $ — $ — $ 679 As at December 31, 2015 Level 1 Level 2 Level 3 Total Restricted deposits – current $ 2,172 — — $ 2,172 Restricted deposits –non-current 2,951 — — 2,951 Derivative liabilities (4 ) — — (4 ) Total $ 5,119 $ — $ — $ 5,119 |
Nature of Operations (Details N
Nature of Operations (Details Narrative) $ in Thousands | Apr. 21, 2016 | Dec. 31, 2016USD ($)Director |
Non-escrow corporate cash and cash equivalents | $ 100 | |
Loan repayment date | Apr. 30, 2018 | |
DSIT Solutions, Ltd [Member] | ||
Company's holdings in DSIT prior to sale transaction | 78.70% | |
Company's holdings after transaction | 41.20% | |
Director Member] | February 2017 [Member] | ||
Number of directors | Director | 3 | |
Borrowing amount | $ 900 | |
Loan repayment date | Apr. 30, 2018 | |
Directors Member] | July 7, 2017 [Member] | ||
Commitment to provide an additional amount | $ 1,000 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Apr. 21, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash equivalents investments, description | money market funds and short-term bank deposits (up to three months from date of deposit or with maturity of three months from date of purchase) that are not restricted as to withdrawal or use, to be cash equivalents. | ||
Short term bank deposits | 3 months | ||
Allowance for doubtful accounts | $ 11 | $ 20 | |
Cash | 801 | ||
Advertising expenses | $ 9 | $ 20 | |
Weighted average number of options and warrants | 4,904,000 | 5,001,000 | |
Omni Metrix [Member] | |||
Estimated life of the customer relationship | 24 months | ||
Advance payment for monitoring fees, term | 12 months | ||
Warrant term | 1 year | ||
Trade Accounts Receivable [Member] | |||
Charged expense | $ 28 | $ 44 | |
Subsidiaries [Member] | |||
Percentage of controlled interest | 50.00% | ||
DSIT Solutions, Ltd [Member] | |||
Company's holdings in DSIT prior to sale transaction | 78.70% | ||
Company's holdings after transaction | 41.20% | ||
DSIT Solutions, Ltd [Member] | Minimum [Member] | |||
Warrant term | 1 year | ||
DSIT Solutions, Ltd [Member] | Maximum [Member] | |||
Warrant term | 2 years |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Schedule of Effect On Net Income and Weighted Average Number of Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Net income (loss) available to common stockholders | $ 145 | $ (10,599) |
Weighted average shares outstanding: Basic | 28,488,000 | 26,803,000 |
Add: Warrants | 24,000 | |
Add: Stock options | 19,000 | |
Weighted average shares outstanding: Diluted | 28,531,000 | 26,803,000 |
Basic and diluted net loss per share | $ 0.01 | $ (0.40) |
DSIT Solutions, Ltd. ('DSIT')50
DSIT Solutions, Ltd. ('DSIT') (Details Narrative) - USD ($) $ in Thousands | Apr. 21, 2016 | Dec. 31, 2016 |
Percentage of investment in DSIT determined based on holdings | 41.20% | |
Loan due from Acorn | $ 340 | |
Unreimbursed expenses | $ 591 | |
Debt maturity date | Apr. 30, 2018 | |
Debt instrument interest rate per annum | 3.15% | |
Due from provisions for vacation and severance | $ 240 | |
Investments in DSIT, initial balance | 5,390 | |
Value attributed to DSIT | $ 13,100 | |
DSIT Solutions, Ltd [Member] | ||
Gross proceeds of sale before escrow, israeli withholding taxes and fees | $ 4,913 | |
Escrow deposit | $ 579 | |
Escrow deposit released month | 18 months | |
Withholding tax paid | $ 266 | |
Transaction costs | 184 | |
Gain on sale of transaction | 3,543 | |
Step-up value of transaction | $ 2,574 | |
Pro rata share of earn-out | 82.40% | |
Earn - out amount | $ 1,000 | |
Pro-rata share earn out over the period | 3 years | |
Proceeds from the exercise of DSIT options | $ 391 | |
DSIT Solutions, Ltd [Member] | Prior Options Exercise [Member] | ||
Percentage of investment in DSIT determined based on holdings | 88.30% | |
DSIT Solutions, Ltd [Member] | Post Options Exercise [Member] | ||
Percentage of investment in DSIT determined based on holdings | 78.70% | |
Prior DSIT Transaction [Member] | ||
Percentage of investment in DSIT determined based on holdings | 78.70% | |
Post DSIT Transaction [Member] | ||
Percentage of investment in DSIT determined based on holdings | 41.20% |
DSIT Solutions, Ltd. ('DSIT') -
DSIT Solutions, Ltd. ('DSIT') - Schedule of Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Apr. 21, 2016 | Dec. 31, 2015 |
Cash and cash equivalents | $ 222 | $ 124 | |
Restricted deposits | 2,172 | ||
Accounts receivable | 1,005 | 6,389 | |
Unbilled revenue | 3,849 | ||
Inventory | 202 | 506 | |
Other current assets | 932 | 1,633 | |
Total current assets | 8,717 | 15,852 | |
Property and equipment, net | 214 | 954 | |
Severance assets | 3,558 | ||
Restricted deposits | 2,951 | ||
Goodwill | 516 | ||
Other assets | 309 | 470 | |
Total assets | 9,240 | 24,330 | |
Short-term bank credit and current maturities of long-term bank debt | 376 | 1,916 | |
Accounts payable | 708 | 2,346 | |
Accrued payroll, payroll taxes and social benefits | 327 | 1,320 | |
Deferred revenue | 2,149 | 5,251 | |
Other current liabilities | 629 | 2,260 | |
Total current liabilities | 5,186 | 16,820 | |
Accrued severance | 4,984 | ||
Other long-term liabilities | 831 | 849 | |
DSIT Solutions, Ltd [Member] | |||
Cash and cash equivalents | 1,047 | $ 516 | 7 |
Restricted deposits | 2,648 | 2,517 | 2,172 |
Accounts receivable | 2,825 | 5,166 | 5,826 |
Unbilled revenue | 4,918 | 4,779 | 3,849 |
Inventory | 481 | 297 | 230 |
Other current assets | 795 | 935 | 698 |
Total current assets | 12,714 | 14,210 | 12,782 |
Property and equipment, net | 569 | 620 | 654 |
Severance assets | 3,915 | 3,762 | 3,558 |
Restricted deposits | 646 | 1,815 | 2,951 |
Due from Acorn | 1,171 | 916 | 802 |
Goodwill | 536 | 516 | |
Other assets | 339 | 80 | 124 |
Total assets | 19,354 | 21,939 | 21,387 |
Short-term bank credit and current maturities of long-term bank debt | 1,239 | 2,655 | 1,917 |
Accounts payable | 1,461 | 2,072 | 1,869 |
Accrued payroll, payroll taxes and social benefits | 1,142 | 1,286 | 1,261 |
Deferred revenue | 431 | 2,219 | 3,487 |
Other current liabilities | 2,736 | 1,615 | 1,417 |
Total current liabilities | 7,009 | 9,847 | 9,951 |
Accrued severance | 5,374 | 5,209 | 4,984 |
Other long-term liabilities | 9 | 38 | 82 |
Total liabilities | $ 12,392 | $ 15,094 | $ 15,017 |
DSIT Solutions, Ltd. ('DSIT')52
DSIT Solutions, Ltd. ('DSIT') - DSIT Results Included in the Company's Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 4 Months Ended | 8 Months Ended | 12 Months Ended | |
Apr. 21, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | $ 8,659 | $ 16,548 | ||
Cost of sales | 5,134 | 10,381 | ||
Gross profit | 3,525 | 6,167 | ||
Selling, general and administrative expenses | 5,651 | 9,632 | ||
Operating income | (3,053) | (5,170) | ||
Income before income taxes | (82) | (5,497) | ||
Income tax expense | (19) | (209) | ||
Net income | (119) | (10,802) | ||
Net income attributable to non-controlling interests | (264) | (105) | ||
Net income attributable to Acorn Energy Inc | $ 145 | (10,599) | ||
DSIT Solutions, Ltd [Member] | ||||
Revenue | $ 5,074 | $ 11,777 | 13,501 | |
Cost of sales | 3,443 | 7,795 | 9,125 | |
Gross profit | 1,631 | 3,982 | 4,376 | |
Research and development expenses, net | 469 | 642 | 1,191 | |
Selling, general and administrative expenses | 1,063 | 2,721 | 3,162 | |
Operating income | 99 | 619 | 23 | |
Finance expense, net | (39) | (134) | (112) | |
Income before income taxes | 60 | 485 | (89) | |
Income tax expense | (19) | 169 | (259) | |
Net income | 41 | 654 | (348) | |
Net income attributable to non-controlling interests | (9) | 49 | ||
Net income attributable to Acorn Energy Inc | $ 32 | $ 268 | $ (299) |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) $ in Thousands | Jul. 16, 2016 | Jul. 12, 2016 | Apr. 21, 2016 | Sep. 30, 2015 | Jan. 02, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Loan bears interest rate | 3.15% | ||||||
Stock-Based Compensation [Member] | |||||||
Stock-based compensation expense included in USSI's net loss | $ 4 | ||||||
GridSense [Member] | |||||||
Sale of business assets, gross sale price | $ 1,000 | ||||||
Indemnity escrow | 100 | ||||||
Indemnity escrow to be released on January 7, 2017 | 50 | ||||||
Indemnity escrow to be released on July 7, 2017 | 50 | ||||||
Paid of accrued severance and other payroll costs | 240 | ||||||
Gain on assets sold, net of transaction costs | $ 944 | ||||||
GridSense [Member] | Out Side Creditor [Member] | |||||||
Amount of outside creditors claims settled | $ 459 | ||||||
GridSense [Member] | Creditor [Member] | |||||||
Disbursed to outside creditors | 47 | ||||||
U.S. Seismic Systems, Inc [Member] | |||||||
Percentage of holdings on an as converted basis | 95.70% | ||||||
Invested in common shares | $ 7,584 | ||||||
Cash investment | 5,355 | ||||||
Investment made by Acorn common shares | 2,229 | ||||||
Additional purchase value of preferred stock | 16,750 | ||||||
Loan to USSI | $ 10,058 | ||||||
Loan bears interest rate | 8.00% | ||||||
U.S. Seismic Systems, Inc [Member] | Series A-1 Preferred Stock [Member] | |||||||
Preferred stock owned | 9,376,401 | ||||||
GridSense [Member] | |||||||
Accrued severance costs | $ 140 | ||||||
Accrual for lease commitment | $ 100 | ||||||
Cash available excluding escrow amounts | 19 | ||||||
Remaining creditor claims | 314 | ||||||
Percentage of borrow against certain accounts receivable | 80.00% | ||||||
Maximum accounts receivable balance borrowing base | $ 750 | ||||||
Line of credit, expiration date | Jul. 16, 2016 | ||||||
Debt interest rate, per month | 1.25% | ||||||
Utilized portion of accounts receivable line | $ 138 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities Related to Discontinued Operations (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 29, 2015 |
Cash | $ 222 | $ 124 | |
Total assets | 9,240 | 24,330 | |
Accounts payable | 708 | 2,346 | |
Accrued payroll, payroll taxes and social benefits | 327 | 1,320 | |
GridSense [Member] | Discontinued Operations [Member] | |||
Cash | 19 | 48 | |
Other current assets and non-current assets | 100 | 1,060 | |
Total assets | 119 | 1,108 | |
Short-term bank credit | 138 | ||
Accounts payable | 501 | 950 | |
Accrued payroll, payroll taxes and social benefits | 90 | 186 | |
Other current and non-current liabilities | 406 | 572 | |
Total liabilities | $ 997 | $ 1,846 | |
U.S. Seismic Systems, Inc [Member] | Discontinued Operations [Member] | |||
Cash | |||
Other current assets and non-current assets | |||
Total assets | |||
Short-term bank credit | 999 | ||
Accounts payable | 1,029 | ||
Accrued payroll, payroll taxes and social benefits | 90 | ||
Other current and non-current liabilities | 1,721 | ||
Total liabilities | $ 3,839 |
Discontinued Operations - Sch55
Discontinued Operations - Schedule of Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | $ 8,659 | $ 16,548 |
Gross profit | 3,525 | 6,167 |
Net loss | (119) | (10,802) |
GridSense [Member] | Discontinued Operations [Member] | ||
Revenues | 212 | 2,507 |
Gross profit | 28 | 21 |
Net loss | $ (286) | (3,923) |
U.S. Seismic Systems, Inc [Member] | Discontinued Operations [Member] | ||
Revenues | 163 | |
Gross profit | (68) | |
Net loss | (772) | |
Loss on deconsolidation | (401) | |
Loss from discontinued operations, net of income taxes | $ (1,173) |
Leap Tide Financing Transacti56
Leap Tide Financing Transaction (Details Narrative) - USD ($) $ in Thousands | Apr. 29, 2016 | Aug. 13, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Debt maturity date | Apr. 30, 2018 | |||
Debt instrument interest rate per annum | 3.15% | |||
Leap Tide Capital Partners LLC [Member] | ||||
Amount borrowed as per the agreement | $ 2,000 | |||
Debt maturity date | Aug. 13, 2016 | |||
Debt instrument interest rate per annum | 10.00% | |||
Initial shares in Leap Tide Loan | 850,000 | |||
Monthly amount of vested rights for each month Leap Tide Loan principal is outstanding | 179,167 | |||
Vested share rights earned by date of repayment | 1,531,396 | |||
Cash repurchase/settlement price per each initial share and each vested share right | 0.30 | |||
Vested shares rights were converted into shares of common stock of company after expiration of cash settlement period | 1,531,396 | |||
Acorn [Member] | ||||
Repayment of Leap Tide Loan | $ 2,000 | |||
LT Loan [Member] | ||||
Accrued interest | $ 86 | |||
Interest expense | $ 281 | 86 | ||
Loan term | 1 year | |||
Debt discount | $ 162 | |||
Amortized debt discount | $ 62 | |||
Remaining debt discount | $ 100 |
Investment in Omnimetrix (Detai
Investment in Omnimetrix (Details Narrative) - USD ($) $ in Thousands | Nov. 23, 2015 | Oct. 16, 2015 | Dec. 31, 2016 |
Loan bear interest rate | 3.15% | ||
Omni Metrix Holdings, Inc. [Member] | |||
Percentage acquired by one of the company's directors | 10.00% | ||
Purchase of Omni Metrix preferred stock | $ 500 | ||
Percentage of ownership in Omni Metrix Holdings, Inc. | 100.00% | ||
Omni Metrix Holdings, Inc. [Member] | Series A Preferred Stock [Member] | |||
Omni Metrix Holdings, Inc. Preferred stock owned | 1,000 | 1,000 | |
Value of additional preferred shares acquired | $ 500 | ||
Percentage of dividends accrued annum | 10.00% | ||
Dividend payable, treated as a loan | $ 115 | ||
Pre-money equity valuation | $ 5,500 | ||
Omni Metrix [Member] | |||
Increase in non-controlling interests | 1,000 | ||
Loan bear interest rate | 8.00% | ||
Loan amount | $ 50 | ||
Loan due date, description | All amounts (principal and interest) are due the later of April 30, 2018 or 90 days following the advance of a new loan |
Restructuring and Related Cha58
Restructuring and Related Charges (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges included in other current liabilities | $ (46) | $ (45) | |
Omni Metrix [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges payable | 159 | 204 | $ 248 |
Repayment of accrued lease liability | 45 | 44 | |
Restructuring charges included in other current liabilities | 46 | 45 | |
Restructuring charges included in other long-term liabilities | $ 113 | $ 159 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory impairment charge | $ 9 | $ 22 |
Inventory valuation reserves | 31 | 22 |
Raw materials related to DSIT | 41 | |
Work in process related to DSIT | 189 | |
PG Segment [Member] | ||
Inventory impairment charge | $ 9 | $ 22 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 156 | $ 287 |
Work-in-process | 189 | |
Finished goods | 46 | 30 |
Inventory, net | $ 202 | $ 506 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Other Current Assets | ||
Prepaid expense and deposits | $ 83 | $ 260 |
Deferred costs | 829 | 813 |
Deferred taxes | 141 | |
Funded severance assets | 51 | |
Employee advances | 2 | 105 |
R&D participation receivable | 168 | |
Other | 18 | 95 |
Other current assets | $ 932 | $ 1,633 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property and Equipment [Member] | ||
Depreciation and amortization of respect of property and equipment | $ 146 | $ 314 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment, Gross | $ 635 | $ 3,050 |
Accumulated depreciation and amortization | 421 | 2,096 |
Property and equipment, net | 214 | 954 |
Computer Hardware And Software [Member] | ||
Property, Plant and Equipment, Gross | 78 | 1,296 |
Accumulated depreciation and amortization | $ 61 | 1,202 |
Computer Hardware And Software [Member] | Minimum [Member] | ||
Estimated Useful Life (in years) | 3 years | |
Computer Hardware And Software [Member] | Maximum [Member] | ||
Estimated Useful Life (in years) | 5 years | |
Equipment [Member] | ||
Estimated Useful Life (in years) | 7 years | |
Property, Plant and Equipment, Gross | $ 218 | 854 |
Accumulated depreciation and amortization | 159 | 347 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment, Gross | 339 | 900 |
Accumulated depreciation and amortization | $ 201 | $ 547 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - Schedule of Changes in Carrying Amounts of Goodwill by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill, Beginning balance | $ 516 | |
Goodwill, Ending balance | $ 516 | |
Energy & Security Sonar Solutions [Member] | ||
Goodwill, Beginning balance | 516 | 518 |
Impairment | ||
Translation adjustment | 20 | (2) |
Deconsolidation of DSIT | (536) | |
Goodwill, Ending balance | $ 516 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||||
Dec. 31, 2016 | Sep. 30, 2016 | Feb. 29, 2016 | Jul. 31, 2014 | Apr. 21, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Short-term bank credit and current maturities of long-term bank debt | $ 376 | $ 1,916 | |||||
Borrowed against certain accounts receivable balances | $ 862 | ||||||
Debt instrument interest rate per annum | 3.15% | ||||||
Israeli CPI [Member] | |||||||
Debt instrument interest rate per annum | 1.00% | ||||||
DSIT [Member] | |||||||
Line of credit, interest rate | 3.10% | ||||||
Repayment of debt, monthly paid amount | $ 11 | ||||||
Proceeds from loans | 292 | ||||||
The amounts due with respect to the loan | $ 75 | ||||||
Loan amount repaid from January 1,2016 to the closing date | $ 43 | ||||||
DSIT [Member] | NIS [Member] | |||||||
Proceeds loan | $ 1,000 | ||||||
Debt repayment period | 2 years | ||||||
DSIT [Member] | Two Israeli Bank [Member] | |||||||
Line of credit | 1,180 | ||||||
Utilized portion of line of credit | $ 979 | ||||||
Israeli Prime Rate Plus [Member] | |||||||
Interest rate above Israel prime rate | 1.80% | ||||||
Omni Metrix [Member] | |||||||
Debt instrument interest rate per annum | 8.00% | ||||||
Omni Metrix [Member] | Loan and Security Agreement [Member] | |||||||
Maximum financing of account receivable formula-based agreement | $ 500 | ||||||
Percentage of monthly service charge | 1.00% | 1.125% | |||||
Debt effective interest rate | 19.50% | ||||||
Percentage of eligible hardware invoices, modified by a new formula | 80.00% | ||||||
Percentage of eligible monitoring invoices, modified by a new formula | 40.00% | ||||||
Percentage of all eligible invoices | 75.00% | ||||||
Loan and security agreement expires | Sep. 30, 2017 | ||||||
Short-term bank credit and current maturities of long-term bank debt | $ 376 | ||||||
Omni Metrix [Member] | Loan and Security Agreement [Member] | Minimum [Member] | |||||||
Line of credit | $ 150 | ||||||
Omni Metrix [Member] | Loan and Security Agreement [Member] | Prime Rate [Member] | |||||||
Debt interest rate description | The greater of prime (3.75% at December 31, 2016) plus 2% or 6% per year. |
Debt - Summary of Debt Activiti
Debt - Summary of Debt Activities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Total debt | $ 376 | $ 1,916 |
DSIT Line-of-credit [Member] | ||
Total debt | 979 | |
DSIT Borrowings Against Receivables [Member] | ||
Total debt | 862 | |
DSIT Borrowings Against Receivables [Member] | ||
Total debt | ||
OmniMetrix Borrowings Against Receivables [Member] | ||
Total debt | $ 376 | |
DSIT Loan Balance [Member] | ||
Total debt | $ 75 |
Other Current Liabilities - Com
Other Current Liabilities - Components of Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 518 | $ 2,081 |
Taxes | 38 | 12 |
Warranty provision | 27 | 122 |
Restructuring liabilities | 46 | 45 |
Other current liabilities | $ 629 | $ 2,260 |
Accrued Severance, Severance 68
Accrued Severance, Severance Assets and Retirement Plans (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Amounts deposited in dedicated funds | $ 138 | $ 375 |
Percentage on contribution of employee salaries | 3.00% | |
Expense related to employer | $ 45 | 100 |
Employer expense related to discontinued operations | $ 4 | $ 50 |
Accrued Severance, Severance 69
Accrued Severance, Severance Assets and Retirement Plans - Breakdown of Company's Severance Liability and Severance Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Compensation and Retirement Disclosure [Abstract] | ||
Current severance liability (included in Accrued payroll, payroll taxes and social benefits) | $ 279 | $ 41 |
Non-current severance liability | 4,984 | |
Total severance liability | 279 | 5,025 |
Current severance assets (included in Other current assets) | 51 | |
Non-current severance assets | 3,558 | |
Total severance assets | $ 3,609 |
Commitments and Contingencies70
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Office rental and automobile leasing expenses | $ 245 | $ 638 |
Operating leases expiration dates | leases will expire on different dates from 2017 to 2019. | |
DSIT [Member] | ||
Office rental and automobile leasing expenses | $ 179 | 528 |
Discontinued Operations [Member] | ||
Office rental and automobile leasing expenses | $ 67 | $ 158 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments on Non-Cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 107 |
2,018 | 110 |
2,019 | 109 |
2,020 | |
2021 and thereafter | |
Total | $ 326 |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jul. 21, 2016 | Dec. 31, 2016 | Mar. 16, 2016 | Dec. 31, 2015 | Sep. 11, 2012 | |
Common stock, shares issued | 29,322,574 | ||||
Common stock, shares outstanding | 29,322,574 | ||||
Common stock par value | $ 0.01 | $ 0.01 | |||
Percentage of voting rights | 50.00% | ||||
Actual vesting period for most options | 3 years | ||||
Intrinsic value of options outstanding | $ 2 | ||||
Intrinsic value of options exercisable | 2 | ||||
Compensation cost related to non-vested awards not yet recognized | $ 6 | ||||
Weighted average period over which unrecognized compensation is expected to be recognized | 9 months 18 days | ||||
2006 Amended and Restated Stock Incentive Plan [Member] | |||||
Number of options available for grant | 979,650 | ||||
Minimum [Member] | |||||
Number of capital stock authorized | 30,000,000 | ||||
Options expire term | 5 years | ||||
Maximum [Member] | |||||
Number of capital stock authorized | 42,000,000 | ||||
Options expire term | 10 years | ||||
Maximum [Member] | 2006 Stock Incentive Plan [Member] | |||||
Increase number of shares available | 1,000,000 | ||||
Board Of Directors [Member] | |||||
Common stock, reverse split ratio | ratio between one-for-ten and one-for-twenty | ||||
Non-Employee Directors [Member] | Maximum [Member] | 2006 Stock Incentive Plan [Member] | |||||
Increase number of shares available | 200,000 | ||||
Non-Employees [Member] | 2006 Stock Incentive Plan [Member] | |||||
Increase number of shares available | |||||
Number of options available for grant | |||||
Warrants [Member] | |||||
Weighted average remaining contractual life | 3 years 2 months 12 days | ||||
Fair value of warrants granted price per share | $ 0.08 |
Equity - Schedule of Stock Opti
Equity - Schedule of Stock Options Fair Value Assumptions Estimated Using Black-Scholes Pricing Model (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Risk-free interest rate | 1.50% | 2.10% |
Expected term of options, in years | 6 years 6 months | 8 years 7 months 6 days |
Expected annual volatility | 80.00% | 63.00% |
Expected dividend yield | 0.00% | 0.00% |
Determined weighted average grant date fair value per option | $ 0.11 | $ 0.51 |
Warrants [Member] | ||
Risk-free interest rate | 1.79% | |
Expected term of options, in years | 7 years | |
Expected annual volatility | 78.00% | |
Expected dividend yield | 0.00% |
Equity - Summary of Stock Optio
Equity - Summary of Stock Option Plans (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Equity - Summary Of Stock Option Plans Details | ||
Number of Options, Outstanding at beginning balance | 2,364,918 | 1,812,428 |
Number of Options, granted | 65,000 | 687,654 |
Number of Options, exercised | ||
Number of Options, forfeited or expired | (379,549) | (135,164) |
Number of Options, Outstanding at end balance | 2,050,369 | 2,364,918 |
Number of Options, Exercisable at end of period | 2,004,534 | 1,778,503 |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 3.51 | $ 4.51 |
Weighted Average Exercise Price, granted | 0.15 | 0.75 |
Weighted Average Exercise Price, exercised | ||
Weighted Average Exercise Price, forfeited or expired | 2.29 | 2.91 |
Weighted Average Exercise Price, Outstanding at end balance | 3.62 | 3.51 |
Weighted Average Exercise Price, Exercisable at end of Period | $ 3.69 | $ 4.16 |
Equity - Summary Information Re
Equity - Summary Information Regarding Options Plan Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Shares Outstanding | shares | 2,050,369 |
Number of Shares Exercisable | shares | 2,004,534 |
Range of Exercise Prices One [Member] | |
Range of Exercise Prices, Lower Limit | $ 0.14 |
Range of Exercise Prices, Upper limit | $ 1.06 |
Number of Shares Outstanding | shares | 677,301 |
Weighted Average Remaining Contractual Life (in years) | 5 years 9 months 18 days |
Weighted Average Exercise Price | $ 0.74 |
Number of Shares Exercisable | shares | 644,800 |
Weighted Average Exercise Price, Exercisable | $ 0.76 |
Range of Exercise Prices Two [Member] | |
Range of Exercise Prices, Lower Limit | 1.68 |
Range of Exercise Prices, Upper limit | $ 2.49 |
Number of Shares Outstanding | shares | 307,985 |
Weighted Average Remaining Contractual Life (in years) | 4 years 8 months 12 days |
Weighted Average Exercise Price | $ 1.74 |
Number of Shares Exercisable | shares | 294,651 |
Weighted Average Exercise Price, Exercisable | $ 1.75 |
Range of Exercise Prices Three [Member] | |
Range of Exercise Prices, Lower Limit | 3.51 |
Range of Exercise Prices, Upper limit | $ 5 |
Number of Shares Outstanding | shares | 279,368 |
Weighted Average Remaining Contractual Life (in years) | 3 years 6 months |
Weighted Average Exercise Price | $ 4.22 |
Number of Shares Exercisable | shares | 279,368 |
Weighted Average Exercise Price, Exercisable | $ 4.22 |
Range of Exercise Prices Four [Member] | |
Range of Exercise Prices, Lower Limit | 5.05 |
Range of Exercise Prices, Upper limit | $ 5.91 |
Number of Shares Outstanding | shares | 320,000 |
Weighted Average Remaining Contractual Life (in years) | 1 year 4 months 24 days |
Weighted Average Exercise Price | $ 5.21 |
Number of Shares Exercisable | shares | 320,000 |
Weighted Average Exercise Price, Exercisable | $ 5.21 |
Range of Exercise Prices Five [Member] | |
Range of Exercise Prices, Lower Limit | 6.31 |
Range of Exercise Prices, Upper limit | $ 7.57 |
Number of Shares Outstanding | shares | 302,356 |
Weighted Average Remaining Contractual Life (in years) | 3 years 2 months 12 days |
Weighted Average Exercise Price | $ 6.90 |
Number of Shares Exercisable | shares | 302,356 |
Weighted Average Exercise Price, Exercisable | $ 6.97 |
Range of Exercise Prices Six [Member] | |
Range of Exercise Prices, Lower Limit | 7.60 |
Range of Exercise Prices, Upper limit | $ 11.42 |
Number of Shares Outstanding | shares | 163,359 |
Weighted Average Remaining Contractual Life (in years) | 2 years 9 months 18 days |
Weighted Average Exercise Price | $ 8.82 |
Number of Shares Exercisable | shares | 163,359 |
Weighted Average Exercise Price, Exercisable | $ 8.82 |
Equity - Stock-Based Compensati
Equity - Stock-Based Compensation Expense Included in Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Total stock compensation expense | $ 89 | $ 661 | |
Cost of Sales [Member] | |||
Total stock compensation expense | [1] | 16 | |
Research and Development Expense [Member] | |||
Total stock compensation expense | [1] | 4 | |
Selling General and Administrative Expense [Member] | |||
Total stock compensation expense | [1] | $ 89 | $ 641 |
[1] | Includes $16, $4 and $59 in Cost of sales, Research and development expense and Selling, general and administrative expense, respectively, for the year ended December 31, 2015 with respect to DSIT. See Note 4 with respect to stock-based compensation expense associated with discontinued operations. |
Equity - Stock-Based Compensa77
Equity - Stock-Based Compensation Expense Included in Statements of Operations (Details) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Total stock compensation expense | $ 89 | $ 661 | |
Cost of Sales [Member] | |||
Total stock compensation expense | [1] | 16 | |
Cost of Sales [Member] | DSIT Solutions, Ltd [Member] | |||
Total stock compensation expense | 16 | ||
Research and Development Expense [Member] | |||
Total stock compensation expense | [1] | 4 | |
Research and Development Expense [Member] | DSIT Solutions, Ltd [Member] | |||
Total stock compensation expense | 4 | ||
Selling General and Administrative Expense [Member] | |||
Total stock compensation expense | [1] | $ 89 | 641 |
Selling General and Administrative Expense [Member] | DSIT Solutions, Ltd [Member] | |||
Total stock compensation expense | $ 59 | ||
[1] | Includes $16, $4 and $59 in Cost of sales, Research and development expense and Selling, general and administrative expense, respectively, for the year ended December 31, 2015 with respect to DSIT. See Note 4 with respect to stock-based compensation expense associated with discontinued operations. |
Equity - Summary Status of DSIT
Equity - Summary Status of DSIT Plan (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Number of Options, Outstanding at beginning balance | 2,364,918 | 1,812,428 | |
Number of Options, Granted at fair value | 65,000 | 687,654 | |
Number of Options, Exercised | |||
Number of Options, Forfeited | (379,549) | (135,164) | |
Number of Options, Outstanding at end balance | 2,050,369 | 2,364,918 | |
Number of Options, Exercisable at end of period | 2,004,534 | 1,778,503 | |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 3.51 | $ 4.51 | |
Weighted Average Exercise Price, Granted at fair value | 0.15 | 0.75 | |
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Forfeited | 2.29 | 2.91 | |
Weighted Average Exercise Price, Outstanding at end balance | 3.62 | 3.51 | |
Weighted Average Exercise Price, Exercisable at end of Period | $ 3.69 | $ 4.16 | |
DSIT Stock Option Plan [Member] | |||
Number of Options, Outstanding at beginning balance | [1] | 239,524 | 239,524 |
Number of Options, Granted at fair value | [1] | ||
Number of Options, Exercised | [1] | (239,524) | |
Number of Options, Forfeited | [1] | ||
Number of Options, Outstanding at end balance | [1] | 239,524 | |
Number of Options, Exercisable at end of period | [1] | 239,524 | |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 1.65 | $ 1.67 | |
Weighted Average Exercise Price, Granted at fair value | |||
Weighted Average Exercise Price, Exercised | 1.63 | ||
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Exercise Price, Outstanding at end balance | 1.65 | ||
Weighted Average Exercise Price, Exercisable at end of Period | $ 1.65 | ||
[1] | The exercise price of 91,754 of these options was NIS 9.38 translated to US dollars using following exchange rates: NIS 3.89 for December 31, 2014, NIS 3.90 for December 31, 2015, and 3.97 for the Closing Date. |
Equity - Summary Status of DS79
Equity - Summary Status of DSIT Plan (Details) (Parenthetical) | Apr. 21, 2016NewIsraeliShekelsshares | Dec. 31, 2016shares | Dec. 31, 2015NewIsraeliShekelsshares | Dec. 31, 2014NewIsraeliShekels | |
Number of options, exercise price was NIS 9.38 | |||||
DSIT Stock Option Plan [Member] | |||||
Number of options, exercise price was NIS 9.38 | [1] | (239,524) | |||
DSIT Stock Option Plan [Member] | NIS [Member] | |||||
Number of options, exercise price was NIS 9.38 | 91,754 | ||||
Exercise price of options exchange rate | NewIsraeliShekels | 9.38 | ||||
Exchange rate | NewIsraeliShekels | 3.97 | 3.90 | 3.89 | ||
[1] | The exercise price of 91,754 of these options was NIS 9.38 translated to US dollars using following exchange rates: NIS 3.89 for December 31, 2014, NIS 3.90 for December 31, 2015, and 3.97 for the Closing Date. |
Equity - Summary of Warrant Act
Equity - Summary of Warrant Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Equity - Summary Of Stock Option Plans Details | ||
Number of shares warrants, outstanding at beginning of year | 2,619,423 | 2,642,423 |
Number of shares warrants, granted | 35,000 | |
Number of shares warrants, exercised | ||
Number of shares warrants, forfeited or expired | (23,000) | |
Number of shares warrants, outstanding and exercisable at end of year | 2,654,423 | 2,619,423 |
Weighted average exercise price, outstanding at beginning of year | $ 1.48 | $ 1.50 |
Weighted average exercise price, granted | 0.13 | |
Weighted average exercise price, exercised | ||
Weighted average exercise price, forfeited or expired | 3.68 | |
Weighted average exercise price, outstanding and exercisable at end of year | $ 1.46 | $ 1.48 |
Finance Income (Expense), Net -
Finance Income (Expense), Net - Schedule of Finance Income (Expense), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
FINANCE EXPENSE, NET [Abstract] | |||
Interest income | $ 1 | $ 26 | |
Interest expense | [1] | (604) | (420) |
Exchange gain, net | 31 | 67 | |
Finance income (expense), net | $ (572) | $ (327) | |
[1] | Interest expense includes $446 and $225 associated with the LT Loan in 2016 and 2015, respectively (see Note 5). |
Finance Income (Expense), Net82
Finance Income (Expense), Net - Schedule of Finance Income (Expense), Net (Details) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
LT Loan [Member] | ||
Interest expense related to Leap Tide loan | $ 446 | $ 225 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance, deferred tax asset, change in amount | $ 326 | |
Percentage of deduction of certain repatriated foreign earnings | 85.00% | |
U.S. Income Tax Rate | 34.00% | 34.00% |
Accrued interest | $ 0 | $ 0 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0 | $ 0 |
Income Taxes - Composition of L
Income Taxes - Composition of Loss from Continuing Operations before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (142) | $ (5,409) |
Foreign | 60 | (88) |
Loss from continuing operations before income taxes | $ (82) | $ (5,497) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Current Federal | ||
Current State and local | ||
Current Foreign | (50) | |
Current Income Tax Expense (Benefit) | (50) | |
Deferred Federal | ||
Deferred State and local | ||
Deferred Foreign | 19 | 259 |
Deferred Income Tax Expense (Benefit) | 19 | 259 |
Total income tax expense | $ 19 | $ 209 |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation Between Federal Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Statutory Federal rates | 34.00% | 34.00% |
Increase (decrease) in income tax rate resulting from Tax on foreign activities | (2.00%) | 6.00% |
Increase (decrease) in income tax rate resulting from Other, net (primarily permanent differences) | (200.00%) | (4.00%) |
Increase (decrease) in income tax rate resulting from Valuation allowance | 145.00% | (40.00%) |
Effective income tax rates | (23.00%) | (4.00%) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets, Employee benefits and deferred compensation | $ 1,745 | $ 1,722 |
Deferred tax assets, asset impairments | 2,619 | 2,693 |
Deferred tax assets, Other temporary differences | (807) | (937) |
Deferred tax assets Net operating loss carryforwards | 21,977 | 21,957 |
Deferred Tax Assets, Gross | 25,534 | 25,435 |
Valuation allowance | (25,534) | (25,208) |
Net deferred tax assets | $ 227 |
Income Taxes - Summary of Tax L
Income Taxes - Summary of Tax Loss Carryforwards (Details) $ in Thousands | Dec. 31, 2016USD ($) | |
Federal [Member] | ||
2023 - 2029 | $ 503 | [1] |
2030 - 2036 | 61,692 | |
Total | 62,195 | [1] |
State [Member] | ||
2023 - 2029 | ||
2030 - 2036 | 13,000 | |
Total | $ 13,000 | |
[1] | The utilization of a portion of these net operating loss carryforwards is limited due to limits on utilizing net operating loss carryforwards under Internal Revenue Service regulations following a change in control. |
Related Party Balances and Tr89
Related Party Balances and Transactions (Details Narrative) - USD ($) $ in Thousands | Apr. 29, 2016 | Apr. 29, 2016 | Mar. 31, 2016 | Jan. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Consulting and other fees to directors | $ 101 | $ 160 | ||||
Director Member] | ||||||
Proceeds from related party debt | $ 300 | |||||
Notes mature days, following proceeds of DSIT transaction | three days | |||||
Repayment of related party debt | $ 275 | |||||
Percentage of interest repaid | 15.00% | |||||
Director One [Member] | ||||||
Proceeds from related party debt | $ 200 | |||||
Percentage of borrowed amounts the company need to repay to each director | 115.00% | |||||
Repayment of related party debt | $ 200 | |||||
Director Two [Member] | ||||||
Proceeds from related party debt | $ 100 | |||||
Percentage of borrowed amounts the company need to repay to each director | 115.00% | |||||
Repayment of related party debt | $ 75 | |||||
Director Three [Member] | ||||||
Proceeds from related party debt | $ 75 | |||||
Percentage of borrowed amounts the company need to repay to each director | 115.00% | |||||
Third Director [Member] | ||||||
Principal amount converted to common stock | $ 100 | |||||
Interest due converted into common stock | $ 15 | |||||
Conversion of promissory note to common stock, shares | 465,587 |
Segment Reporting and Geograp90
Segment Reporting and Geographic Information (Details Narrative) | 12 Months Ended |
Dec. 31, 2016OperatingSegments | |
Segment Reporting [Abstract] | |
Number of operating segment | 2 |
Segment Reporting and Geograp91
Segment Reporting and Geographic Information - Summary of Segmented Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Segment Reporting Information [Line Items] | |||
Revenue from external customers | $ 8,659 | $ 16,548 | |
Intersegment revenues | |||
Segment gross profit | 3,525 | 6,167 | |
Depreciation and amortization | 143 | 297 | |
Segment income (loss) before income taxes | (1,128) | (1,528) | |
Segment assets | 2,552 | 18,206 | |
Expenditures for segment assets | 33 | 132 | |
PG [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from external customers | 2,903 | 2,513 | |
Intersegment revenues | |||
Segment gross profit | 1,516 | 1,472 | |
Depreciation and amortization | 65 | 70 | |
Segment income (loss) before income taxes | (848) | (1,437) | |
Segment assets | 1,673 | 1,691 | |
Expenditures for segment assets | |||
CP [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from external customers | 682 | 534 | |
Intersegment revenues | |||
Segment gross profit | 378 | 319 | |
Depreciation and amortization | 15 | 15 | |
Segment income (loss) before income taxes | (352) | (116) | |
Segment assets | 879 | 298 | |
Expenditures for segment assets | |||
Energy & Security Sonar Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from external customers | [1] | 4,620 | 12,093 |
Intersegment revenues | [1] | ||
Segment gross profit | [1] | 1,517 | 3,834 |
Depreciation and amortization | [1] | 53 | 185 |
Segment income (loss) before income taxes | [1] | 82 | (195) |
Segment assets | [1] | 15,777 | |
Expenditures for segment assets | [1] | 30 | 114 |
Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue from external customers | [1] | 454 | 1,408 |
Intersegment revenues | [1] | ||
Segment gross profit | [1] | 114 | 542 |
Depreciation and amortization | [1] | 10 | 27 |
Segment income (loss) before income taxes | [1] | (10) | 220 |
Segment assets | [1] | 440 | |
Expenditures for segment assets | [1] | $ 3 | $ 18 |
[1] | Results for the year ended December 31, 2016, only include DSIT's results for the period January 1, 2016 to April 21, 2016. See Note 3. |
Segment Reporting and Geograp92
Segment Reporting and Geographic Information - Schedule of Reconciliation of Segment Data to Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | ||
Total net loss before income taxes for reportable segments | $ (1,118) | $ (1,748) |
Other operational segment net income (loss) before income taxes | (10) | 220 |
Segment loss before income taxes | (1,128) | (1,528) |
Gain on sale of interest in DSIT, net of transaction costs | 3,543 | |
Unallocated net income (cost) of DSIT headquarters | (6) | 120 |
Unallocated net cost of corporate headquarters | (2,491) | (4,089) |
Consolidated net loss before taxes on income | $ (82) | $ (5,497) |
Segment Reporting and Geograp93
Segment Reporting and Geographic Information - Schedule of Reconciliation of Segment Data to Consolidated Statement of Operations (Details) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Stock compensation expense | $ 239 | $ 582 |
LT Loan [Member] | ||
Interest expense debt | $ 446 | $ 225 |
Segment Reporting and Geograp94
Segment Reporting and Geographic Information - Reconciliation of Segment Data to Consolidated Statement Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | |||
Total assets for reportable segments | $ 2,552 | $ 17,765 | |
Total assets of other operational segment | 441 | ||
Assets of discontinued operations | 119 | 1,108 | |
Unallocated assets of DSIT headquarters | 4,367 | ||
Unallocated assets of OmniMetrix headquarters | 213 | 397 | |
Assets of corporate headquarters | [1] | 6,356 | 252 |
Total consolidated assets | $ 9,240 | $ 24,330 | |
[1] | Includes the investment in DSIT of $5,658 and the escrow deposit of $579 from the DSIT Transaction at December 31, 2016. |
Segment Reporting and Geograp95
Segment Reporting and Geographic Information - Reconciliation of Segment Data to Consolidated Statement Balance Sheet (Details) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Segment Reporting [Abstract] | ||
Investment in DSIT | $ 5,658 | |
Escrow deposit | $ 579 | $ 100 |
Segment Reporting and Geograp96
Segment Reporting and Geographic Information - Reconciliation of Segment Assets - Other Significant Items (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Depreciation and amortization | $ 146 | $ 314 |
Expenditures for assets | 33 | 159 |
Segment Total [Member] | ||
Depreciation and amortization | 143 | 297 |
Expenditures for assets | 33 | 132 |
Adjustments [Member] | ||
Depreciation and amortization | 3 | 17 |
Expenditures for assets | $ 27 |
Segment Reporting and Geograp97
Segment Reporting and Geographic Information - Schedule of Revenue from External Customers by Geographical Areas (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | $ 8,659 | $ 16,548 |
United States [Member] | ||
Revenues | 3,550 | 3,019 |
Israel [Member] | ||
Revenues | 3,061 | 7,699 |
Asia [Member] | ||
Revenues | 2,013 | 5,587 |
Other [Member] | ||
Revenues | $ 35 | $ 243 |
Segment Reporting and Geograp98
Segment Reporting and Geographic Information - Schedule of Long Lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Long-lived assets | $ 214 | $ 954 |
United States [Member] | ||
Long-lived assets | 214 | 299 |
Israel [Member] | ||
Long-lived assets | $ 655 |
Segment Reporting and Geograp99
Segment Reporting and Geographic Information - Revenues, Accounts Receivable and Unbilled Revenue from Major Customers (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | ||||
Customer A [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | $ 1,828 | $ 2,701 | |||
Major Customer balance percentage | 21.00% | 14.00% | |||
Customer A [Member] | Accounts Receivable [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1],[2] | ||||
Major Customer balance percentage | [1],[2] | ||||
Customer A [Member] | Unbilled Revenues [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1],[2] | ||||
Major Customer balance percentage | [1],[2] | ||||
Customer B [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1] | $ 2,735 | |||
Major Customer balance percentage | [1] | 14.00% | |||
Customer B [Member] | Accounts Receivable [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [2] | [1] | $ 1,844 | ||
Major Customer balance percentage | [2] | [1] | 28.00% | ||
Customer B [Member] | Unbilled Revenues [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [2] | $ 1,507 | |||
Major Customer balance percentage | [2] | 39.00% | |||
Customer C [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1] | $ 2,889 | |||
Major Customer balance percentage | [1] | 15.00% | |||
Customer C [Member] | Accounts Receivable [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [2] | [1] | $ 1,049 | ||
Major Customer balance percentage | [2] | [1] | 16.00% | ||
Customer C [Member] | Unbilled Revenues [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [2] | $ 1,087 | |||
Major Customer balance percentage | [2] | 28.00% | |||
Customer D [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | $ 1,295 | $ 2,200 | |||
Major Customer balance percentage | 15.00% | 12.00% | |||
Customer D [Member] | Accounts Receivable [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [2] | [1] | $ 834 | ||
Major Customer balance percentage | [2] | [1] | 12.00% | ||
Customer D [Member] | Unbilled Revenues [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1],[2] | ||||
Major Customer balance percentage | [1],[2] | ||||
Customer E [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1] | ||||
Major Customer balance percentage | [1] | ||||
Customer E [Member] | Accounts Receivable [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [2] | [1] | $ 1,112 | ||
Major Customer balance percentage | [2] | [1] | 17.00% | ||
Customer E [Member] | Unbilled Revenues [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1],[2] | ||||
Major Customer balance percentage | [1],[2] | ||||
Customer F [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1] | ||||
Major Customer balance percentage | [1] | ||||
Customer F [Member] | Accounts Receivable [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1],[2] | ||||
Major Customer balance percentage | [1],[2] | ||||
Customer F [Member] | Unbilled Revenues [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [2] | $ 408 | |||
Major Customer balance percentage | [2] | 11.00% | |||
Customer G [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [3] | [1] | |||
Major Customer balance percentage | [3] | [1] | |||
Customer G [Member] | Accounts Receivable [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [2] | $ 283 | [1] | ||
Major Customer balance percentage | [2] | 28.00% | [1] | ||
Customer G [Member] | Unbilled Revenues [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Major Customer balance | [1],[2] | ||||
Major Customer balance percentage | [1],[2] | ||||
[1] | Balance is not significant | ||||
[2] | Following the closing of the DSIT Transaction (see Note 3), the Company no longer consolidates the assets, liabilities or results of DSIT, but rather reports its investment in DSIT using the equity method. Accordingly, the Company no longer reports DSIT's Accounts Receivable or Unbilled Revenue balances. | ||||
[3] | Includes $239 and $582 of stock compensation expense for the years ended December 31, 2016 and 2015, respectively. Also includes $446 and $225 of interest expense associated with the LT Loan for the years ended December 31, 2016 and 2015, respectively (see Note 5). |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Escrow deposits - continuing operations | $ 579 | |
Escrow deposits - discontinued operations | 100 | |
Restricted deposits - current | $ 2,172 | |
Restricted deposits - non-current | 2,951 | |
Derivative liabilities | (4) | |
Total | 679 | 5,119 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Escrow deposits - continuing operations | 579 | |
Escrow deposits - discontinued operations | 100 | |
Restricted deposits - current | 2,172 | |
Restricted deposits - non-current | 2,951 | |
Derivative liabilities | (4) | |
Total | 679 | 5,119 |
Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Escrow deposits - continuing operations | ||
Escrow deposits - discontinued operations | ||
Restricted deposits - current | ||
Restricted deposits - non-current | ||
Derivative liabilities | ||
Total | ||
Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Escrow deposits - continuing operations | ||
Escrow deposits - discontinued operations | ||
Restricted deposits - current | ||
Restricted deposits - non-current | ||
Derivative liabilities | ||
Total |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) $ in Thousands | Feb. 16, 2017 | Dec. 31, 2016 |
Debt repayment date | Apr. 30, 2018 | |
Accrued interest rate | 12.50% | |
DSIT Solutions, Ltd [Member] | ||
Company's holdings in DSIT | 41.20% | |
After February 15, 2018 [Member] | ||
Accrued interest rate | 16.50% | |
Board Of Directors [Member] | ||
Borrowing amount | $ 1,900 | |
Immediately funded loan amount | $ 900 | |
Directors Member] | ||
Debt instrument maturity description | maturity date no earlier than April 2018 | |
Directors Member] | After July 7, 2017 [Member] | ||
Borrowing amount | $ 1,000 |