|
Delaware
|
22-2786081
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
|
4
West Rockland Road
|
||
Montchanin,
Delaware
|
19710
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Class
|
Outstanding
at August 9, 2010
|
|
Common
Stock, $0.01 par value per share
|
15,642,753
shares
|
PART
I. Financial Information
|
||||
Item
1.
|
Financial
Statements
|
|||
Unaudited
Consolidated Financial Statements:
|
||||
Consolidated
Balance Sheets
|
||||
as
of December 31, 2009 and June 30, 2010
|
1
|
|||
Consolidated
Statements of Operations
|
||||
for
the three and six month periods ended June 30, 2009 and
2010
|
2
|
|||
Consolidated
Statement of Changes in Equity
|
||||
for
the six month period ended June 30, 2010
|
3
|
|||
Consolidated
Statements of Cash Flows
|
||||
for
the six month periods ended June 30, 2009 and 2010
|
4
|
|||
Notes
to Consolidated Financial Statements
|
6
|
|||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition
|
|||
and
Results of Operations
|
22
|
|||
Item
4.
|
Controls
and Procedures
|
33
|
||
PART
II. Other Information
|
||||
Item
1.
|
Legal
Proceedings
|
34
|
||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
34
|
||
Item
6.
|
Exhibits
|
36
|
||
Signatures
|
37
|
|
As of
December 31,
2009
|
As of
June 30,
2010
|
||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 11,208 | $ | 10,005 | ||||
Restricted
deposits
|
1,627 | 1,939 | ||||||
Accounts
receivable, net
|
3,541 | 5,858 | ||||||
Unbilled
revenue and work-in-process
|
4,113 | 5,417 | ||||||
Inventory
|
1,848 | 3,730 | ||||||
Other
current assets
|
2,317 | 4,391 | ||||||
Total
current assets
|
24,654 | 31,340 | ||||||
Property
and equipment, net
|
3,357 | 8,975 | ||||||
Other
investments and loans to equity investees
|
2,796 | 2,537 | ||||||
Funds
in respect of employee termination benefits
|
2,074 | 2,141 | ||||||
Restricted
deposits
|
611 | 809 | ||||||
Intangible
assets, net
|
8,194 | 13,944 | ||||||
Goodwill
|
6,679 | 13,748 | ||||||
Deferred
taxes
|
227 | 252 | ||||||
Other
assets
|
143 | 477 | ||||||
Total
assets
|
$ | 48,735 | $ | 74,223 | ||||
LIABILITIES
AND EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Short-term
bank credit and current maturities of long-term bank debt
|
$ | 430 | $ | 1,121 | ||||
Accounts
payable
|
1,607 | 3,684 | ||||||
Accrued
payroll, payroll taxes and social benefits
|
1,409 | 1,679 | ||||||
Advances
from customers
|
1,924 | 1,826 | ||||||
Other
current liabilities
|
3,064 | 6,961 | ||||||
Total
current liabilities
|
8,434 | 15,271 | ||||||
Long-term
liabilities:
|
||||||||
Liability
for employee termination benefits
|
3,129 | 3,259 | ||||||
Long-term
debt
|
405 | 355 | ||||||
Other
long-term liabilities
|
669 | 349 | ||||||
Total
long-term liabilities
|
4,203 | 3,963 | ||||||
Equity:
|
||||||||
Acorn
Energy, Inc. stockholders
|
||||||||
Common
stock - $0.01 par value per share:
Authorized
– 30,000,000 shares; Issued –13,248,813 and 16,917,925 shares at December
31, 2009 and June 30, 2010, respectively
|
132 | 169 | ||||||
Additional
paid-in capital
|
58,373 | 78,491 | ||||||
Warrants
|
290 | 274 | ||||||
Accumulated
deficit
|
(23,343 | ) | (29,618 | ) | ||||
Treasury
stock, at cost –1,275,081 shares at December 31, 2009 and
June 30, 2010, respectively
|
(4,827 | ) | (4,827 | ) | ||||
Accumulated
other comprehensive income
|
152 | (213 | ) | |||||
Total
Acorn Energy, Inc. stockholders’ equity
|
30,777 | 44,276 | ||||||
Non-controlling
interests
|
5,321 | 10,713 | ||||||
Total
equity
|
36,098 | 54,989 | ||||||
Total
liabilities and equity
|
$ | 48,735 | $ | 74,223 |
Six months ended
June 30,
|
Three months ended
June 30,
|
|||||||||||||||
2009
|
2010
|
2009
|
2010
|
|||||||||||||
Revenues:
|
||||||||||||||||
Catalytic
regeneration
|
$ | 9,937 | $ | 9,333 | $ | 4,547 | $ | 4,855 | ||||||||
Projects
|
4,002 | 5,258 | 2,036 | 2,751 | ||||||||||||
Software
license and services
|
2,102 | 1,667 | 1,075 | 897 | ||||||||||||
Smart
grid distribution products and services
|
— | 517 | — | 517 | ||||||||||||
Other
|
217 | 203 | 122 | 104 | ||||||||||||
16,258 | 16,978 | 7,780 | 9,124 | |||||||||||||
Cost
of sales:
|
||||||||||||||||
Catalytic
regeneration
|
6,466 | 5,546 | 2,931 | 3,000 | ||||||||||||
Projects
|
2,351 | 2,817 | 1,132 | 1,475 | ||||||||||||
Software
license and services
|
416 | 380 | 145 | 204 | ||||||||||||
Smart
grid distribution products and services
|
— | 191 | — | 191 | ||||||||||||
Other
|
156 | 165 | 82 | 83 | ||||||||||||
9,389 | 9,099 | 4,290 | 4,953 | |||||||||||||
Gross
profit
|
6,869 | 7,879 | 3,490 | 4,171 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Research
and development expenses, net of SRED credits of $1,016
in 2009
|
(348 | ) | 1,542 | (624 | ) | 872 | ||||||||||
Dividends
received from EnerTech
|
— | (135 | ) | — | — | |||||||||||
Selling,
general and administrative expenses
|
8,807 | 13,886 | 4,629 | 7,565 | ||||||||||||
Total
operating expenses
|
8,459 | 15,293 | 4,005 | 8,437 | ||||||||||||
Operating
loss
|
(1,590 | ) | (7,414 | ) | (515 | ) | (4,266 | ) | ||||||||
Finance
income (expense), net
|
(84 | ) | (305 | ) | 85 | (355 | ) | |||||||||
Gain
on investment in GridSense
|
— | 1,327 | — | 1,327 | ||||||||||||
Gain
on sale of Comverge shares
|
1,227 | — | 810 | — | ||||||||||||
Income
(loss) before taxes on income
|
(447 | ) | (6,392 | ) | 380 | (3,294 | ) | |||||||||
Tax
expense on income
|
— | (198 | ) | — | (123 | ) | ||||||||||
Income
(loss) from operations of the Company and its consolidated subsidiaries
|
(447 | ) | (6,590 | ) | 380 | (3,417 | ) | |||||||||
Share
in losses of GridSense
|
(129 | ) | — | — | — | |||||||||||
Net
income (loss)
|
(576 | ) | (6,590 | ) | 380 | (3,417 | ) | |||||||||
Net
(income) loss attributable to non-controlling interests
|
(144 | ) | 315 | (37 | ) | 265 | ||||||||||
Net
income (loss) attributable to Acorn Energy Inc.
|
$ | (720 | ) | $ | (6,275 | ) | $ | 343 | $ | (3,152 | ) | |||||
Basic
and diluted earnings per share attributable to Acorn
Energy Inc.:
|
||||||||||||||||
Net
income (loss) per share attributable to Acorn
Energy Inc. – basic
|
$ | (0.06 | ) | $ | (0.45 | ) | $ | 0.03 | $ | (0.21 | ) | |||||
Net
income (loss) per share attributable to Acorn
Energy Inc. – diluted
|
$ | (0.06 | ) | $ | (0.45 | ) | $ | 0.03 | $ | (0.21 | ) | |||||
Weighted
average number of shares outstanding attributable to Acorn
Energy Inc. – basic
|
11,456 | 13,839 | 11,377 | 15,161 | ||||||||||||
Weighted
average number of shares outstanding attributable to Acorn
Energy Inc. – diluted
|
11,456 | 13,839 | 11,553 | 15,161 |
Acorn Energy, Inc. Stockholders
|
||||||||||||||||||||||||||||||||||||||||
Number
of Shares
|
Common
Stock
|
Additional
Paid-In
Capital
|
Warrants
|
Accumulated
Deficit
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
Income
|
Total Acorn
Energy, Inc.
Stockholders
Equity
|
Non-
controlling
interests
|
Total
Equity
|
|||||||||||||||||||||||||||||||
Balances
as of December 31, 2009
|
13,249 | $ | 132 | $ | 58,373 | $ | 290 | $ | (23,343 | ) | $ | (4,827 | ) | $ | 152 | $ | 30,777 | $ | 5,321 | $ | 36,098 | |||||||||||||||||||
Net
loss
|
— | — | — | — | (6,275 | ) | — | — | (6,275 | ) | (315 | ) | (6,590 | ) | ||||||||||||||||||||||||||
Differences
from translation of subsidiaries’ financial statements and equity
investees
|
— | — | — | — | — | — | (365 | ) | (365 | ) | (11 | ) | (376 | ) | ||||||||||||||||||||||||||
Comprehensive
loss
|
— | — | — | — | — | — | — | (6,640 | ) | (326 | ) | (6,966 | ) | |||||||||||||||||||||||||||
Issuance
by CoaLogix of CoaLogix shares to non-controlling interests (see Note
5)
|
— | — | 492 | — | — | — | — | 492 | 1,891 | 2,383 | ||||||||||||||||||||||||||||||
Shares
issued in capital raise, net of transaction costs (see Note 8
(a))
|
2,232 | 22 | 11,423 | — | — | — | — | 11,445 | — | 11,445 | ||||||||||||||||||||||||||||||
Shares
issued in acquisition of Decision Dynamics (see Note 4(a))
|
1,000 | 10 | 5,630 | — | — | — | — | 5,640 | — | 5,640 | ||||||||||||||||||||||||||||||
Shares
issued in acquisition of GridSense (see Note 4(b))
|
356 | 4 | 1,863 | — | — | — | — | 1,867 | — | 1,867 | ||||||||||||||||||||||||||||||
Non-controlling
interests created in USSI consolidation (see Note 4(c))
|
— | — | — | — | — | — | — | — | 3,600 | 3,600 | ||||||||||||||||||||||||||||||
Adjustment
of non-controlling interests following exercise of USSI options
(see
Note 4(c)(i))
|
— | — | 176 | — | — | — | — | 176 | (176 | ) | — | |||||||||||||||||||||||||||||
Other
|
— | — | — | — | — | — | — | — | 6 | 6 | ||||||||||||||||||||||||||||||
Stock
option compensation
|
— | — | 299 | — | — | — | — | 299 | — | 299 | ||||||||||||||||||||||||||||||
Stock
option compensation of subsidiaries
|
— | — | — | — | — | — | — | — | 397 | 397 | ||||||||||||||||||||||||||||||
Exercise
of options and warrants
|
81 | 1 | 235 | (16 | ) | — | — | — | 220 | — | 220 | |||||||||||||||||||||||||||||
Balances
as of June 30, 2010
|
16,918 | $ | 169 | $ | 78,491 | $ | 274 | $ | (29,618 | ) | $ | (4,827 | ) | $ | (213 | ) | $ | 44,276 | $ | 10,713 | $ | 54,989 |
Six months ended
June 30,
|
||||||||
2009
|
2010
|
|||||||
Cash
flows provided by (used in) operating activities:
|
||||||||
Net
loss
|
$ | (576 | ) | $ | (6,590 | ) | ||
Adjustments
to reconcile net income to net cash used in operating
activities:
|
||||||||
Depreciation
and amortization
|
893 | 1,064 | ||||||
Share
in losses of GridSense
|
129 | — | ||||||
Exchange
rate adjustment on restricted deposits
|
83 | — | ||||||
Exchange
rate adjustment on amounts funded for employee termination benefits net of
exchange adjustment on liability for employee termination
benefits
|
(22 | ) | (24 | ) | ||||
Increase
in liability for employee termination benefits
|
107 | 210 | ||||||
Amortization
of stock-based deferred compensation
|
766 | 696 | ||||||
Deferred
taxes
|
— | (26 | ) | |||||
Impairments
|
80 | — | ||||||
Gain
on investment in GridSense
|
— | (1,327 | ) | |||||
Gain
on sale of Comverge shares
|
(1,227 | ) | — | |||||
Other
|
— | (6 | ) | |||||
Change
in operating assets and liabilities:
|
||||||||
Increase
in accounts receivable, unbilled work-in process, other current
and
other
assets
|
(301 | ) | (4,074 | ) | ||||
Increase
in inventory
|
(396 | ) | (1,062 | ) | ||||
Increase
(decrease) in accounts payable, accrued payroll, payroll taxes and social
benefits, advances from customers, other current liabilities
and
other liabilities
|
(1,620 | ) | 2,416 | |||||
Net
cash used in operating activities
|
(2,084 | ) | (8,723 | ) | ||||
Cash
flows provided by (used in) investing activities:
|
||||||||
Proceeds
from sale of Comverge shares and covered calls
|
3,681 | — | ||||||
Investment
in EnerTech
|
(500 | ) | (500 | ) | ||||
Restricted
deposits
|
(500 | ) | (1,182 | ) | ||||
Release
of restricted deposits
|
— | 672 | ||||||
Loan
to GridSense prior to acquisition
|
— | (200 | ) | |||||
Amounts
funded for employee termination benefits
|
(109 | ) | (123 | ) | ||||
Acquisitions
of property and equipment
|
(414 | ) | (5,631 | ) | ||||
Acquisitions
of license
|
— | (82 | ) | |||||
Acquisition
of USSI, net of cash acquired (See Schedule A)
|
— | 7 | ||||||
Acquisition
of Decision Dynamics, net of cash acquired (See Schedule
B)
|
— | 1,021 | ||||||
Acquisition
of GridSense, net of cash acquired (See Schedule C)
|
— | (1,352 | ) | |||||
Acquisition
of OMI (See Schedule D)
|
— | — | ||||||
Net
cash provided by (used in) investing activities
|
2,158 | (7,370 | ) | |||||
Cash
flows provided by (used in) financing activities:
|
||||||||
Proceeds
from capital raise, net of transaction costs
|
— | 11,445 | ||||||
Issuance
of shares to non-controlling interests in consolidated
subsidiary
|
1,094 | 2,383 | ||||||
Exercise
of options and warrants
|
— | 220 | ||||||
Short-term
debt borrowings, net
|
(241 | ) | 693 | |||||
Repayments
of long-term debt
|
(4 | ) | (65 | ) | ||||
Other
|
— | 6 | ||||||
Purchase
of additional shares of DSIT
|
(294 | ) | — | |||||
Purchase
of treasury shares
|
(1,062 | ) | — | |||||
Net
cash provided by (used in) financing activities
|
(507 | ) | 14,682 | |||||
Effect
of exchange rate changes on cash and cash equivalents
|
(97 | ) | 208 | |||||
Net
decrease in cash and cash equivalents
|
(530 | ) | (1,203 | ) | ||||
Cash
and cash equivalents at beginning of period
|
15,142 | 11,208 | ||||||
Cash
and cash equivalents at end of period
|
$ | 14,612 | $ | 10,005 |
Non-cash
items:
|
||||||||
Unrealized
gain (loss) from Comverge shares
|
$ | 384 | ||||||
Intangibles
acquired by Coreworx in consideration for future royalties
|
$ | 99 | ||||||
Adjustment
of additional paid-in-capital and non-controlling interests from
investment in CoaLogix by non-controlling interests
|
$ | 245 | $ | 492 | ||||
Adjustment
of additional paid-in-capital and non-controlling from exercise of option
by Acorn in USSI
|
$ | 176 | ||||||
Value
of Acorn shares issued in the acquisition of Decision
Dynamics
|
$ | 5,640 | ||||||
Value
of Acorn shares issued in the acquisition of GridSense
|
$ | 1,867 | ||||||
Schedule
A:
|
||||||||
Assets/liabilities
acquired in the acquisition of USSI:
|
||||||||
Other
current assets
|
$ | (55 | ) | |||||
Property
and equipment
|
(56 | ) | ||||||
Intangibles
|
(2,565 | ) | ||||||
Goodwill
|
(1,402 | ) | ||||||
Current
liabilities
|
285 | |||||||
Prior
year investment in USSI
|
200 | |||||||
Non-controlling
interests
|
3,600 | |||||||
$ | 7 | |||||||
Schedule
B:
|
||||||||
Assets/liabilities
acquired in the acquisition of Decision Dynamics:
|
||||||||
Other
current assets
|
$ | (1,149 | ) | |||||
Property
and equipment
|
(339 | ) | ||||||
Intangibles
|
(1,248 | ) | ||||||
Goodwill
|
(2,476 | ) | ||||||
Current
liabilities
|
593 | |||||||
Value
of Acorn shares issued in the acquisition of Decision
Dynamics
|
5,640 | |||||||
$ | 1,021 | |||||||
Schedule
C:
|
||||||||
Assets/liabilities
acquired in the acquisition of GridSense:
|
||||||||
Inventory
|
$ | (833 | ) | |||||
Other
current assets
|
(482 | ) | ||||||
Property
and equipment
|
(71 | ) | ||||||
Other
assets
|
(370 | ) | ||||||
Intangibles
|
(2,314 | ) | ||||||
Goodwill
|
(3,587 | ) | ||||||
Current
liabilities
|
1,935 | |||||||
Long-term
debt
|
23 | |||||||
Non-current
liabilities
|
90 | |||||||
Gain
on step-up of investment
|
1,327 | |||||||
Consideration
paid – see Note 4(b) for detail
|
4,406 | |||||||
Less
cash included in consideration paid
|
(1,476 | ) | ||||||
$ | (1,352 | ) | ||||||
Schedule
D:
|
||||||||
Assets/liabilities
acquired in the acquisition of OMI:
|
||||||||
Other
current assets
|
(39 | ) | ||||||
Property
and equipment
|
(41 | ) | ||||||
Intangibles
|
(322 | ) | ||||||
Current
liabilities
|
402 | |||||||
$ | — |
As of
December 31,
2009
|
As of
June 30,
2010
|
|||||||
Raw
materials
|
$ | 550 | $ | 959 | ||||
Work-in-process
|
1,298 | 2,240 | ||||||
Finished
goods
|
— | 531 | ||||||
$ | 1,848 | $ | 3,730 |
(a)
|
Acquisition
of Decision Dynamics Technology
Ltd.
|
Cash
|
$ | 1,021 | ||
Other
current assets
|
1,149 | |||
Property
and equipment
|
339 | |||
Intangible
assets
|
1,248 | |||
Goodwill
|
2,476 | |||
Total
assets acquired
|
6,233 | |||
Current
liabilities
|
(593 | ) | ||
Fair
value acquired
|
$ | 5,640 |
(b)
|
Acquisition
of GridSense
|
Cash
|
$ | 124 | ||
Inventory
|
833 | |||
Other
current assets
|
482 | |||
Property
and equipment
|
71 | |||
Other
assets
|
370 | |||
Intangible
assets
|
2,314 | |||
Goodwill
|
3,587 | |||
Total
assets acquired
|
7,781 | |||
Current
liabilities
|
(1,935 | ) | ||
Long-term
debt
|
(23 | ) | ||
Non-current
liabilities
|
(90 | ) | ||
Fair
value acquired
|
$ | 5,733 | ||
Total
purchase price
|
$ | 4,406 | ||
Previous
carrying value of investment
|
- | |||
Gain
on step-up of fair value of prior ownership interest
|
1,327 | |||
$ | 5,733 |
|
·
|
The
Company had the right to acquire 95,469 of these shares under the option
in consideration for payment of $300 on or before March 31, 2010. (This
option was exercised immediately following the signing of the Option
Agreements – see below).
|
|
·
|
The
Company had the right to acquire 63,646 of these shares in consideration
for payment of $200 on or before May 31, 2010. (This option was
exercised on May 23, 2010 – see
below)
|
|
·
|
The
Company has the right to acquire an additional 95,469 shares on or before
August 27, 2010 in consideration for payment of $300 (This option was
partially exercised on June 14, 2010 – see
below).
|
Cash
|
$ | 307 | ||
Other
current assets
|
37 | |||
Property
and equipment
|
56 | |||
Other
assets
|
18 | |||
Intangible
assets
|
2,565 | |||
Goodwill
|
1,402 | |||
Total
assets acquired
|
4,385 | |||
Current
liabilities
|
(285 | ) | ||
Fair
value acquired
|
$ | 4,100 |
Accounts
receivable
|
$ | 16 | ||
Inventory
|
23 | |||
Property
and equipment
|
41 | |||
Intangible
assets
|
322 | |||
Total
assets acquired
|
402 | |||
Current
liabilities
|
(352 | ) | ||
Estimated
earn-out payment
|
(50 | ) | ||
Total
liabilities acquired
|
$ | (402 | ) |
Six months
ended June
30, 2010
|
Six months
ended June
30, 2009
|
Three
months
ended June
30, 2010
|
Three
months
ended June
30, 2009
|
|||||||||||||
In
thousands (except per share data)
|
||||||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||
Results
of Operations
|
||||||||||||||||
Sales
|
$ | 17,462 | $ | 18,126 | $ | 8,723 | $ | 9,259 | ||||||||
Net
loss*
|
$ | (7,715 | ) | $ | (1,233 | ) | $ | (4,244 | ) | $ | (254 | ) | ||||
Net
loss per share – basic and diluted
|
$ | (0.53 | ) | $ | (0.10 | ) | $ | (0.27 | ) | $ | (0.02 | ) |
*
|
Net
loss during the six and three month periods ended June 30, 2010 include
approximately $406 of costs recorded on Decision Dynamics books with
respect to Coreworx’ acquisition of
them.
|
Six months ended
June 30,
|
Three months ended
June 30,
|
|||||||||||||||
2009
|
2010
|
2009
|
2010
|
|||||||||||||
Net
income (loss) attributable to NCI in CoaLogix
|
$ | 78 | $ | (41 | ) | $ | (9 | ) | $ | (45 | ) | |||||
Net
income attributable to NCI in DSIT
|
66 | 110 | 46 | 50 | ||||||||||||
Net
loss attributable to NCI in USSI
|
— | (384 | ) | — | (270 | ) | ||||||||||
Net
income (loss) attributable to NCI
|
$ | 144 | $ | (315 | ) | $ | 37 | $ | (265 | ) |
CoaLogix
segment
|
Naval & RT
Solutions
segment
|
Coreworx
segment
|
GridSense
segment
|
USSI segment
|
Total
|
|||||||||||||||||||
Balance
as of December 31, 2009
|
3,714 | $ | 534 | $ | 2,431 | $ | — | $ | — | $ | 6,679 | |||||||||||||
Goodwill
recorded in the acquisition of USSI (see Note 4(c)(ii))
|
— | — | — | — | 1,402 | 1,402 | ||||||||||||||||||
Goodwill
recorded in the acquisition of Decision Dynamics (see Note
4(a))
|
— | — | 2,476 | — | — | 2,476 | ||||||||||||||||||
Goodwill
recorded in the acquisition of GridSense (see Note 4(b))
|
— | — | — | 3,587 | — | 3,587 | ||||||||||||||||||
Translation
adjustment
|
— | (14 | ) | (144 | ) | (238 | ) | — | (396 | ) | ||||||||||||||
Balance
as of June 30, 2010
|
$ | 3,714 | $ | 520 | $ | 4,763 | $ | 3,349 | $ | 1,402 | $ | 13,748 |
CoaLogix
segment
|
Naval
& RT
Solutions
segment
|
Coreworx
Segment
|
GridSense
segment
|
USSI
segment
|
||||||||||||||||||||||||||||||||||||||||
SCR
Technologies**
|
Naval
Technologies
|
Software
and
Customer
Relationships
|
Software
and
Customer
Relationships
|
Sensor
Technologies
|
||||||||||||||||||||||||||||||||||||||||
Cost
|
A.A.*
|
Cost
|
A.A.*
|
Cost
|
A.A.*
|
Cost
|
A.A.*
|
Cost
|
A.A.*
|
Total
|
||||||||||||||||||||||||||||||||||
Balance
as of December 31, 2009
|
$ | 5,511 | $ | (1,184 | ) | $ | 527 | $ | (128 | ) | $ | 3,841 | $ | (373 | ) | $ | — | $ | — | $ | — | $ | — | $ | 8,194 | |||||||||||||||||||
Acquisition
of license
|
82 | — | — | — | — | — | — | — | — | — | 82 | |||||||||||||||||||||||||||||||||
Intangibles
recorded in the acquisition of USSI (see Note 4(c)(ii))
|
— | — | — | — | — | — | — | — | 2,565 | — | 2,565 | |||||||||||||||||||||||||||||||||
Intangibles
recorded in the acquisition of Decision Dynamics (see Note
4(a))
|
— | — | — | — | 1,248 | — | — | — | — | — | 1,248 | |||||||||||||||||||||||||||||||||
Intangibles
recorded in the acquisition of GridSense (see Note 4(b))
|
— | — | — | — | — | — | 2,314 | — | — | — | 2,314 | |||||||||||||||||||||||||||||||||
Intangibles
recorded in the acquisition of OMI (see Note 4(d))
|
— | — | — | — | — | — | 322 | — | — | — | 322 | |||||||||||||||||||||||||||||||||
Amortization
|
— | (273 | ) | — | (33 | ) | — | (169 | ) | — | (56 | ) | — | (43 | ) | (574 | ) | |||||||||||||||||||||||||||
Cumulative
translation adjustment
|
— | — | (14 | ) | 4 | (104 | ) | 8 | (101 | ) | — | — | — | (207 | ) | |||||||||||||||||||||||||||||
Balance
as of June 30, 2010
|
$ | 5,593 | $ | (1,457 | ) | $ | 513 | $ | (157 | ) | $ | 4,985 | $ | (534 | ) | $ | 2,535 | $ | (56 | ) | $ | 2,565 | $ | (43 | ) | $ | 13,944 |
Number of
Options
(in shares)
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding
at December 31, 2009
|
1,745,165 | $ | 3.52 | ||||||||||
Granted
|
195,000 | $ | 6.00 | ||||||||||
Exercised
|
(67,500 | ) | $ | 2.36 | |||||||||
Forfeited
or expired
|
— | ||||||||||||
Outstanding
at June 30, 2010
|
1,872,665 | $ | 3.82 |
3.8
years
|
$ | 2,873 | |||||||
Exercisable
at June 30, 2010
|
1,424,121 | $ | 3.55 |
3.6
years
|
$ | 2,484 |
Volatility
|
68 | % | ||
Expected term
(years)
|
6.4 | |||
Risk
free interest rate
|
3.1 | % | ||
Expected
dividend yield
|
None
|
Six
months
ended
June 30,
2009
|
Six
months
ended
June 30,
2010
|
Three
months
ended
June 30,
2009
|
Three
months
ended
June 30,
2010
|
|||||||||||||
Cost
of sales
|
$ | 98 | $ | 9 | $ | 49 | $ | 4 | ||||||||
Research
and development expense
|
40 | 62 | 21 | 31 | ||||||||||||
Selling,
general and administrative expenses
|
628 | 625 | 287 | 305 | ||||||||||||
Total
stock based compensation expense
|
$ | 766 | $ | 696 | $ | 357 | $ | 340 |
Number of
Warrants
(in shares)
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
|
|||||||
Outstanding
at December 31, 2009
|
246,904 | $ | 4.50 |
2.3
years
|
|||||
Granted
|
— | ||||||||
Exercised
|
(13,598 | ) | |||||||
Forfeited
or expired
|
— | ||||||||
Outstanding
and exercisable at June 30, 2010
|
233,306 | $ | 4.50 |
1.8
years
|
Gross Carrying
Amount
|
||||
Balance
at December 31, 2009
|
$ | 284 | ||
Warranties
issued
|
135 | |||
Adjustment
of provision
|
(3 | ) | ||
Warranty
claims
|
— | |||
Balance
at June 30, 2010*
|
$ | 416 |
As
at June 30, 2010
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Cash
and cash equivalents
|
$ | 10,005 | $ | — | $ | — | $ | 10,005 | ||||||||
Restricted
deposits – current and non-current
|
2,748 | — | — | 2,748 | ||||||||||||
Derivative
liabilities
|
(34 | ) | — | — | (34 | ) | ||||||||||
Total
|
$ | 12,719 | $ | — | $ | — | $ | 12,719 |
As
at December 31, 2009
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Cash
and cash equivalents
|
$ | 11,208 | $ | — | $ | — | $ | 11,208 | ||||||||
Restricted
deposits – current and non-current
|
2,238 | — | — | 2,238 | ||||||||||||
Derivative
liabilities
|
(5 | ) | — | — | (5 | ) | ||||||||||
Total
|
$ | 13,441 | $ | — | $ | — | $ | 13,441 |
|
·
|
The
Company’s CoaLogix segment provides SCR (Selective Catalytic Reduction)
catalyst and management services through the Company’s CoaLogix
subsidiary. SCR systems are used by coal-fired power plants to reduce
nitrogen oxides (NOx) emissions.
|
|
·
|
Naval
and RT Solutions whose activities are focused on the following areas –
sonar and acoustic related solutions for energy, defense and commercial
markets and other real-time and embedded hardware & software
development and production. Naval and RT Solutions activities are provided
through the Company’s DSIT Solutions Ltd.
subsidiary.
|
|
·
|
The
Company’s Coreworx segment (formerly known as the Energy Infrastructure
Software segment) provides software for integrated project information and
cost control solutions in the energy exploration and power generation
markets. The software is used primarily for management of large capital
projects. The software and solutions are provided by the Company's
Coreworx subsidiary and by Decision Dynamics which was acquired by
Coreworx in April 2010 (see Note 4(a)). As Decision Dynamics was acquired
in April 2010, Coreworx segment information for the three and six month
period ended June 30, 2010 is not comparable to the three and six month
periods ended June 30, 2009.
|
|
·
|
The
Company’s GridSense segment provides Smart Grid Distribution Automation
products and services. As these activities were acquired in May
2010 (see Note 4(b)), there are no comparative results reported for these
activities for the three and six month periods ended June 30, 2009. The
Company’s GridSense segment also includes the activities of OMI which was
acquired in May 2010 (see Note
4(d)).
|
|
·
|
The
Company’s USSI segment provides Energy and Security Sensor Systems
services. USSI was effectively acquired in February 2010 (see
Note 4(c)). USSI's primary focus is to develop and produce fiber optic
sensing systems for the energy and security markets. As these
activities were effectively acquired in February 2010, there are no
comparative results reported for these activities for the three and six
month periods ended June 30, 2009.
|
CoaLogix
|
Naval and RT
Solutions
|
Coreworx
|
GridSense
|
USSI
|
Other
|
Total
|
||||||||||||||||||||||
Six
months ended June 30, 2010:
|
||||||||||||||||||||||||||||
Revenues
from external customers
|
$ | 9,333 | $ | 4,815 | $ | 1,667 | $ | 517 | $ | 32 | $ | 614 | $ | 16,978 | ||||||||||||||
Intersegment
revenues
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Segment
gross profit
|
3,787 | 2,256 | 1,287 | 327 | 10 | 212 | 7,879 | |||||||||||||||||||||
Stock
compensation expense
|
213 | — | 196 | — | — | — | 409 | |||||||||||||||||||||
Depreciation
and amortization expense
|
589 | 88 | 257 | 63 | 64 | 12 | 1,073 | |||||||||||||||||||||
Segment
income (loss) before income taxes
|
(204 | ) | 970 | (5,204 | ) | (324 | ) | (436 | ) | 4 | (5,194 | ) | ||||||||||||||||
Six
months ended June 30, 2009:
|
||||||||||||||||||||||||||||
Revenues
from external customers
|
$ | 9,937 | $ | 3,636 | $ | 2,102 | $ | — | $ | — | $ | 583 | $ | 16,258 | ||||||||||||||
Intersegment
revenues
|
— | 5 | — | — | — | — | 5 | |||||||||||||||||||||
Segment
gross profit
|
3,471 | 1,549 | 1,686 | — | — | 163 | 6,869 | |||||||||||||||||||||
Stock
compensation expense
|
230 | 2 | 111 | — | — | — | 343 | |||||||||||||||||||||
Depreciation
and amortization expense
|
613 | 93 | 173 | — | — | 14 | 893 | |||||||||||||||||||||
Segment
income (loss) before income taxes
|
533 | 413 | (603 | ) | — | — | (21 | ) | 322 | |||||||||||||||||||
Three
months ended June 30, 2010:
|
||||||||||||||||||||||||||||
Revenues
from external customers
|
$ | 4,855 | $ | 2,534 | $ | 897 | $ | 517 | $ | 32 | $ | 289 | $ | 9,124 | ||||||||||||||
Intersegment
revenues
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Segment
gross profit
|
1,855 | 1,208 | 693 | 327 | 10 | 78 | 4,171 | |||||||||||||||||||||
Stock
compensation expense
|
92 | — | 106 | — | — | — | 198 | |||||||||||||||||||||
Depreciation
and amortization expense
|
305 | 44 | 157 | 63 | 51 | 6 | 626 | |||||||||||||||||||||
Segment
income (loss) before income taxes
|
(224 | ) | 509 | (3,022 | ) | (324 | ) | (309 | ) | (3 | ) | (3,373 | ) | |||||||||||||||
Three
months ended June 30, 2009:
|
||||||||||||||||||||||||||||
Revenues
from external customers
|
$ | 4,547 | $ | 1,840 | $ | 1,075 | $ | — | $ | — | $ | 318 | $ | 7,780 | ||||||||||||||
Intersegment
revenues
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Segment
gross profit
|
1,616 | 831 | 931 | — | — | 112 | 3,490 | |||||||||||||||||||||
Stock
compensation expense
|
129 | — | 57 | — | — | — | 186 | |||||||||||||||||||||
Depreciation
and amortization expense
|
308 | 48 | 92 | — | — | 8 | 456 | |||||||||||||||||||||
Segment
income (loss) before income taxes
|
(43 | ) | 215 | 224 | — | — | 21 | 417 |
Six months ended
June 30,
|
Three months ended
June 30,
|
||||||||||||||||
2009
|
2010
|
2009
|
2010
|
||||||||||||||
Total
income (loss) for reportable segments
|
$ | 343 | $ | (5,198 | ) | $ | 396 | $ | (3,370 | ) | |||||||
Other
operational segment income (loss)
|
(21 | ) | 4 | 21 | (3 | ) | |||||||||||
Total
operating income (loss)
|
322 | (5,194 | ) | 417 | (3,373 | ) | |||||||||||
Share
of losses in GridSense
|
(129 | ) | — | — | — | ||||||||||||
Non-controlling
interests
|
(144 | ) | 315 | (37 | ) | 265 | |||||||||||
Impairments
|
(80 | ) | — | (10 | ) | — | |||||||||||
Gain
on investment in GridSense
|
— | 1,327 | — | 1,327 | |||||||||||||
Gain
on sale of Comverge shares
|
1,227 | — | 810 | — | |||||||||||||
Dividends
received
|
— | 135 | — | — | |||||||||||||
Income
tax expense*
|
— | (198 | ) | — | (123 | ) | |||||||||||
Net
loss of corporate headquarters and other unallocated
costs**
|
(1,916 | ) | (2,660 | ) | (837 | ) | (1,248 | ) | |||||||||
Net
income (loss) attributable to Acorn Energy Inc.
|
$ | (720 | ) | $ | (6,275 | ) | $ | 343 | $ | (3,152 | ) |
Six months ended
June 30,
|
Three months ended
June 30,
|
|||||||||||||||
2009
|
2010
|
2009
|
2010
|
|||||||||||||
CoaLogix
|
$ | 9,937 | $ | 9,333 | $ | 4,547 | $ | 4,855 | ||||||||
DSIT
Solutions
|
4,219 | 5,429 | 2,158 | 2,823 | ||||||||||||
Coreworx
|
2,102 | 1,667 | 1,075 | 897 | ||||||||||||
GridSense
|
— | 517 | — | 517 | ||||||||||||
USSI
|
— | 32 | — | 32 | ||||||||||||
Total
|
$ | 16,258 | $ | 16,978 | $ | 7,780 | $ | 9,124 |
Backlog at
June 30,
2010
|
||||
CoaLogix
|
$ | 11.6 | ||
DSIT
Solutions
|
5.9 | |||
Coreworx
|
1.3 | |||
GridSense
|
0.2 | |||
USSI
|
0.4 | |||
Total
|
$ | 19.4 |
|
·
|
Catalyst
regeneration technologies and management services for SCR systems which
are provided through our CoaLogix
subsidiary.
|
|
·
|
Sonar
and acoustic related solutions for energy, defense and commercial markets
and other real-time embedded hardware & software development is
reported in our Naval and RT Solutions segment whose activities are
conducted through our DSIT
subsidiary.
|
|
·
|
Software
for integrated project information and cost control solutions for energy
exploration and power generation markets provided through our Coreworx
subsidiary. The reported operations of Coreworx include the operations of
Decision Dynamics Inc. which was acquired by Coreworx in April
2010.
|
|
·
|
Smart
grid distribution automation products and services provided through our
GridSense subsidiary which was acquired in May
2010.
|
|
·
|
Energy
and security sensor systems services which is provided by USSI which was
effectively acquired by us in February
2010.
|
Six months ended June 30,
|
Three months ended June 30,
|
|||||||||||||||||||||||||||||||||||||||
2009
|
2010
|
Change
|
2009
|
2010
|
Change
|
|||||||||||||||||||||||||||||||||||
($,000)
|
% of
sales
|
($,000)
|
% of
sales
|
From
2009 to
2010
|
($,000)
|
% of
sales
|
($,000)
|
% of
sales
|
From
2009 to
2010
|
|||||||||||||||||||||||||||||||
Sales
|
$ | 16,258 | 100 | % | $ | 16,978 | 100 | % | 4 | % | $ | 7,780 | 100 | % | $ | 9,124 | 100 | % | 17 | % | ||||||||||||||||||||
Cost
of sales
|
9,389 | 58 | 9,099 | 54 | (3 | ) | 4,290 | 55 | 4,953 | 54 | 15 | |||||||||||||||||||||||||||||
Gross
profit
|
6,869 | 42 | 7,879 | 46 | 15 | 3,490 | 45 | 4,171 | 46 | 20 | ||||||||||||||||||||||||||||||
R&D
expenses, net
|
(348 | ) | (2 | ) | 1,542 | 9 | (543 | ) | (624 | ) | (8 | ) | 872 | 10 | (240 | ) | ||||||||||||||||||||||||
Dividends
from EnerTech
|
— | — | (135 | ) | (1 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
SG&A
expenses
|
8,807 | 54 | 13,886 | 82 | 58 | 4,629 | 59 | 7,565 | 83 | 63 | ||||||||||||||||||||||||||||||
Operating
loss
|
(1,590 | ) | (10 | ) | (7,414 | ) | (44 | ) | 366 | (515 | ) | (7 | ) | (4,266 | ) | (47 | ) | 728 | ||||||||||||||||||||||
Finance
income (expense), net
|
(84 | ) | (1 | ) | (305 | ) | (2 | ) | 263 | 85 | 1 | (355 | ) | (4 | ) | (518 | ) | |||||||||||||||||||||||
Gain
on investment in GridSense
|
— | — | 1,327 | 8 | — | — | 1,327 | 15 | ||||||||||||||||||||||||||||||||
Gain
on sale of Comverge shares
|
1,227 | 8 | — | (100 | ) | 810 | 10 | — | (100 | ) | ||||||||||||||||||||||||||||||
Income
before taxes on income
|
(447 | ) | (3 | ) | (6,392 | ) | (38 | ) | 1,330 | 380 | 5 | (3,294 | ) | (36 | ) | (967 | ) | |||||||||||||||||||||||
Taxes
on income
|
— | — | (198 | ) | (1 | ) | — | — | (123 | ) | (1 | ) | ||||||||||||||||||||||||||||
Income
(loss) from operations of the Company and its consolidated
subsidiaries
|
(447 | ) | (3 | ) | (6,590 | ) | (39 | ) | 1,374 | 380 | 5 | (3,417 | ) | (37 | ) | (999 | ) | |||||||||||||||||||||||
Share
of losses in GridSense
|
(129 | ) | (1 | ) | — | (100 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Net
income (loss)
|
(576 | ) | (4 | ) | (6,590 | ) | (39 | ) | 1,044 | 380 | 5 | (3,417 | ) | (37 | ) | (999 | ) | |||||||||||||||||||||||
Net
(income) loss attributable to non-controlling
interests
|
(144 | ) | (1 | ) | 315 | 2 | (319 | ) | (37 | ) | (1 | ) | 265 | 3 | (816 | ) | ||||||||||||||||||||||||
Net
income (loss) attributable to Acorn Energy Inc.
|
$ | (720 | ) | (4 | ) | $ | (6,275 | ) | (37 | ) | 772 | $ | 343 | 4 | $ | (3,152 | ) | (35 | ) | (1,019 | ) |
Cash Payments Due During Year Ending June 30,
|
||||||||||||||||||||
(amounts in thousands)
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
2011
|
2012-
2013
|
2014-
2015
|
2016 and
thereafter
|
|||||||||||||||
Long-term
bank debt and utilized lines-of-credit
|
$ | 1,476 | $ | 1,121 | $ | 286 | $ | 69 | $ | — | ||||||||||
Operating
leases
|
6,747 | 2,219 | 2,562 | 1,011 | 955 | |||||||||||||||
Potential
severance obligations (1)
|
3,287 | 28 | — | 1,009 | 2,250 | |||||||||||||||
Investment
in EnerTech(2)
|
2,350 | 2,350 | — | — | — | |||||||||||||||
Investment
in CoaLogix (3)
|
600 | 600 | — | — | — | |||||||||||||||
Purchase
commitments
|
2,674 | 2,674 | — | — | — | |||||||||||||||
Royalties
(4)
|
$ | 155 | 5 | 30 | 70 | 50 | ||||||||||||||
Total
contractual cash obligations
|
$ | 17,289 | $ | 8,997 | $ | 2,878 | $ | 2,159 | $ | 3,255 |
3.1
|
Certificate
of Incorporation of the Registrant, with amendments thereto (incorporated
herein by reference to Exhibit 3.1 to the Registrant’s Registration
Statement on Form S 1 (File No. 33 70482)).
|
|
3.2
|
Certificate
of Ownership and Merger dated September 15, 2006 effecting the name change
to Acorn Factor, Inc. (incorporated herein by reference to Exhibit 3.1 to
the Registrant’s Current Report on Form 8-K filed September 21,
2006).
|
|
3.3
|
Certificate
of Ownership and Merger dated December 21, 2007 effecting the name change
to Acorn Energy, Inc. (incorporated herein by reference to Exhibit 3.1 to
the Registrant’s Current Report on Form 8-K filed January 3,
2008).
|
|
3.4
|
Certificate
of Amendment to the Certificate of Incorporation, filed with the Secretary
of State of the State of Delaware on June 15, 2010 (incorporated herein by
reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K
filed June 16, 2010).
|
|
10.1
|
Acorn
Energy, Inc. 2006 Amended and Restated Stock Incentive Plan (as amended
and restated effective June 10, 2010) (incorporated herein by reference to
Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed June 16,
2010).
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.#
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.#
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.#
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32.2
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Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.#
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ACORN
ENERGY, INC.
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Dated: August
12, 2010
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By:
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/s/ Michael
Barth
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Michael
Barth
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Chief
Financial Officer
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