ACFN 10-K & 10-Q changes, risk factors and insider trading

Part of our business plan includes the acquisitionpossibility of acquiring new companies either as new platform companies or complimentary companies. Any failure to effectively integrate any future acquisitions into our controls, systems and procedures could materially adversely affect our business, results of operations, financial condition and cash flow.

Our financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and trade accounts receivable. Our cash was deposited with a U.S. bank and amounted to $2,326,000$4,454,000 at December 31, 2024.2025. We had one customer, the party to to the Material Contract, as defined below under Other Matters in Item 7. Management’s Discussion and Analysis of Financial Financial Condition and Results of Operations, which represented 61%approximately 42% of the accounts receivable at December 31, 2024 of which 53%2025. was collected asAs of March 4,3, 2025.2026, 58% of this balance had been collected, with the remainder not yet due. Typically, credit risk with respect to the balance of trade receivables is generally diversified due to the number of entities comprising our customer base. However, at December 31, 2024,2025, the balance of accounts receivable under the Material Contract wasrepresented themore majoritythan 40% of the total outstanding balance of accounts receivable. Although we do not believe there is a significant risk of non-performance by this customer, any failures or defaults on their part could negatively impact the value of our financial instruments and could have a material adverse effect on our business, operations or financial condition.

We rely extensively on information technology systems, networks and services, including internet sites, data hosting and processing facilities and tools, physical security systems and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or used for third-parties or their vendors, to assist in conducting our business. A significant breakdown, invasion, corruption, destruction or interruption of critical information technology systems or infrastructure, by our workforce, others with authorized access to our systems or unauthorized persons could negatively impact our operations. The ever-increasing use and evolution of technology, including cloud-based computing,computing and AI, creates opportunities for the unintentional dissemination or intentional destruction or modification of confidential information stored in our, or our third-party providers’ systems, portable media or storage devices. We could also experience a business interruption, theft of confidential information or reputational damage from industrial espionage attacks, malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. We have invested in appropriate industry protections and monitoring practices of our data and IT and have established a Cybersecurity Steering Committee to reduce these risks and continue to monitor our systems on an ongoing basis for any current or potential threats. While we have purchased cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any losses incurred. Moreover, as cyber-attacks increase in frequency and magnitude, including by actors using AI, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations. There can be no assurance that our continuing efforts will prevent breakdowns or breaches of our and/or our third-party providers’ databases or systems that could adversely affect our business.

Some of OmniMetrix’s current and potential competitors have significantly greater resources and broader name recognition than it does. As a result, these competitors may have greater credibility with OmniMetrix’s existing and potential customers. They also may be able to adopt more aggressive pricing policies and devote greater resources to the development, promotion and sale of their products, which would allow them to respond more quickly to new or emerging technologies or changes in customer requirements. In particular, at the present time we are facing significant competition from certain generator manufacturers who offer their own monitoring solutions. The leveraging of any of such advantages by our current and/or potential competitors could hinder OmniMetrix’s ability to compete effectively.

OmniMetrix sells equipment and services which monitor third-party products; thusthus, its revenues are dependent on the continued sales of such third-party products.

Following the emergence of machine-to-machine (“M2M”) and IoT applications whereby companies aggregate multiple sensors and monitors into a simplified dashboard for customers, OmniMetrix believes it plays a key role in this economic ecosystem. In addition, OmniMetrix continues to see a growing need for backup power infrastructure to secure critical military, government, and private sector assets against emergency events including terroristgrid attacks,outages, natural disasters, and cybersecurity threats. Residential, commercialthreats and terrorist attacks. Commercial, industrial and residential standby generators, turbines, compressors, pumps, pumpjacks, light towers and other industrial equipment are part of the critical infrastructure increasingly becoming monitored in IoT applications. OmniMetrix solutions monitor critical equipment used by cell towers, manufacturing plants, medical facilities, data centers, retail stores, public transportation systems, energy distribution and federal, state and municipal government facilities, in addition to residential back-up generators. Given that OmniMetrix monitors all major brands of critical equipment and continues to invest in research and development in response to customer and potential customer feedback, OmniMetrix remains well positioned as a competitive participant in this market to continue to grow its customer base and expand its product offerings.

On June 1, 2024, we entered into a contract (the “Material Contract”) with one of the nation’s largest cell phone providers to provide monitoring hardware and services. Under the contract, OmniMetrix willhas provideprovided monitoring devices and related remote monitoring and control services for between 5,000 toand 10,000 cell tower backup generators in the U.S. The monitoring hardware and monitoring services, which will be deployed over a two-year period. Shipping of hardware commenced in the third quarter of 2024 and installation and monitoring services commenced in the fourth quarter of 2024. WeDuring havethe year ended December 31, 2025, we recognized $2,293,000 in hardware revenue and $452,000 in first-year monitoring revenue from this contract. During the year ended December 31, 2024, we recognized $1,637,000 in hardware revenue and $24,000$21,000 in first-year monitoring revenue from this contract. We have shipped all hardware that has been ordered under this contract asto ofdate. year-endWe 2024.will Ourcontinue currentto expectationhave ofannual totalrenewal monitoring revenue overon thethese lifeunits of the contract is approximately $5.4 million, which encompasses the revenue from the sales of the hardware and the firsteach year offor monitoring.all Weconnected have not included in this estimate monitoring after the first year.units.

In preparing the financial statements, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported. These estimates can also affect our supplemental information disclosures, including information about contingencies, risk and financial condition. We believe, given current facts and circumstances, that our estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates and estimates may vary as new facts and circumstances arise. We make routine estimates and judgments in determining net realizable value of accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other reserves as well as the amortization period for deferred commissions payable. Management believes our most critical accounting estimates and assumptions are in the area of revenue recognition and valuation allowance.

We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. The net carrying amount of the Company’s deferred tax assets is based on the Company’s belief that it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. The ultimate realization of the deferred tax assets depends upon our ability to generate sufficient taxable income in the future. In forecasting future taxable income, managementmanagement’s usesprojections and beliefs are based upon a variety of estimates and makesnumerous assumptions regardingmade by significantour futuremanagement events,with includingrespect theto, timingamong and numberother things, interest rates, forecasted revenue of newthe hardware sales contracts and associated monitoring revenue.revenue or revenue streams that could generate sufficient income. In evaluating our ability to recover our deferred tax assets, we consider and weigh all available positive and negative evidence, including our past operating results, the existence of cumulative losses in the most recent years and our forecast of future taxable income. When the likelihood of the realization of existing deferred tax assets changes, adjustments to the valuation allowance are charged in the period in which the determination is made. If our estimates and assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets, resulting in additional income tax expense in the Company’s Consolidated Statements of Operations, or conversely to reduce the existing valuation allowance resulting in less income tax expense.

InThe lightCompany ofcurrently thehas Company’s generation ofa three-year cumulative income position which is positive income through December 31, 2024, the Company believesevidence that it is more-likely-than-notmore thatlikely athan portion ofnot the deferred tax assets will be utilized. Therefore, the Company has released valuation allowance on its deferred tax assets (other than as stated above) in the amount of $4,686,000 for the year ended December 31, 2024.realized. As of December 31, 2024,2025, we believe, based on our projections, that a partial valuation allowance of $11,400,000$10,326,000, continues isto be necessary against our deferred tax assets. Uncertainty exists related to the generation of future hardware and monitoring revenue, nonetheless the Company believes sufficient positive evidence exists which supports the partial reversal of the valuation allowance. In recent years, the Company executed new contracts, growing hardware and monitoring revenue which resulted in cumulative pre-tax earnings of $1,476,000 over the prior three years which we believe is significant positive evidence to support the reversal of valuation allowance during 2024. At this time, however, we cannot assure you that we will be successful in doing so. Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when appropriate. As of December 31, 2024, the Company has completed a 382 analysis and concluded that none of the unreserved net operating losses were subject to 382 limitations.

Revenue. In 2024,2025, OmniMetrix recorded total revenue of $10,986,000,$11,478,000, as compared to total revenue of $8,059,000$10,986,000 in 2023,2024, for an increase of $2,927,000$492,000 (36%5%). As previously stated, OmniMetrix has two divisions: PG and CP. The PG segment includes our monitoring device for generators, industrial air compressors and our annunciator products. The CP segment includes our monitoring device for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. In 2024,2025, revenue of $9,882,000$10,741,000 was attributed to the PG segment and revenue of $1,104,000$737,000 was attributed to the CP segment, as compared to the 20232024 revenue of $7,000,000$9,882,000 that was attributed to the PG segment and $1,059,000$1,104,000 that was attributed to the CP segment. Hardware revenue increaseddecreased $2,636,000$515,000 (69%8%) from $3,797,000 during the year ended December 31, 2023 to $6,433,000 during the year ended December 31, 2024.2024 to $5,918,000 during the year ended December 31, 2025. The decrease in total hardware revenue during the yearsyear ended December 31, 2024 and 20232025 is further detailed in the table below:

PG hardware revenue increaseddecreased $2,585,000$155,000 (86%3%) during the year ended December 31, 20242025 to $5,579,000$5,424,000 compared to $2,994,000$5,579,000 during the year ended December 31, 2023. Hardware sales under the Material Contract represented 63% of the 86% increase.2024. We also had ana increasedecrease in CP hardware revenue of $51,000$360,000 (6%42%) to $494,000 during the year ended December 31, 2025 from $854,000 during the year ended December 31, 2024 from $803,000 during the year ended December 31, 2023. The increase in total hardware revenue was due to recognition of sales revenue from the Material Contract as well as increased sales of other PG products, offset by a decrease in service revenue and custom designed units.2024. Monitoring revenue increased $291,000 $1,007,000 (7%22%) from $4,262,000$4,553,000 in the year ended December 31, 2024 to $5,560,000 in the year ended December 31, 2023 to $4,553,000 in the year ended December 31, 2024.2025. The increase in monitoring revenue was due to an increase in the number of connections being monitored and growth in our customer base.

Gross profit. Gross profit was $7,999,000,$8,815,000, reflecting a 73%77% gross margin on revenue,revenue in 20242025, compared with a gross profit of $6,004,000,$7,999,000, reflecting a 74%73% gross margin on revenue,revenue in 2023.2024. The gross margin wasincreased ato percentage point lower77% in 20242025 due to a greater volumesales of hardwarethe new Omni and OmniPro salesproducts which have a lowerhigher gross margin than monitoring.the older model hardware products and due to higher monitoring revenue, which has a 95% gross margin, as a result of more connections. Gross margin on hardware revenue for the year ended December 31, 20242025 was 57%60% compared compared to 54%57% for the year ended December 31, 2023.2024. Gross margin on monitoring revenue was 94% for the year ended December 31, 20242025 compared compared to 93%94% for the year ended December 31, 2023.2024.

R&D expense. During 2024,2025, OmniMetrix recorded $1,012,000$1,094,000 of R&D expense as compared to $875,000$1,012,000 in 2023,2024, an increase of $137,000$82,000 (16%8%). The increase in R&D expense in 20242025 is related to increases in wages and bonuses paid to our engineering personnel in 20242025 andas thewell expensesas andan materials paidaddition to third-partyour consultantsengineering team in the continuedfourth quarter of 2024. This increase was offset by the reduction of third-party consultant expenses due to the completion of the recent launch of the Omni and OmniPro, which had been a significant development of next-generation PG project, and CPan productsaddition and explorationto intoour potentialin-house newsenior productengineering lines.staff. We expect a moderate increase in R&D expense for 20252026 due to the hiring of anotherengineering senior level engineer, as well as engineering salary increases granted effective OctoberJanuary 1, 2024,2026, and for continued investment in work on certain initiatives to continue to redesign certain older products and expand product lines to increase our level of innovation ahead of our competitors.

OmniMetrix’s SG&A expense increased $32,000$322,000 (0.8%8%), from $3,998,000 in 2023 to $4,030,000 in 2024.2024 to $4,352,000 in 2025. This increase was primarily due to increases of $251,000(i) $215,000 in commissionpersonnel expensesexpenses, and(ii) $100,000$66,000 in IT consulting and staff augmentation feesfees, (iii) $58,000 in facilities expense due to the lease amendment for our office space, and (iv) $57,000 in net aggregate expenses in other categories offset by decreases in (i) personnelcommission expenses of $153,000, which was due to the elimination of the vice president of sales position offset by increases related to staff additions, promotions, bonuses$61,000 and cost of living wage increases, (ii) $69,000$13,000 in travel and trade show expenses, (iii) $46,000 in other consulting and contract labor expenses, (iv) $39,000 in depreciation and amortization primarily related to IT assets and (v) $12,000 in net aggregate decreases in other expense categories.expenses. We anticipate that our annual SG&A costs in 2025 2026 will increase by approximately 6%9% primarily due to the increase in our facility lease expense pursuant to the lease amendment executed in June 2025 to extend the lease to November 2030 and also to increasing wage and benefit expenses as a result of merit increases,increases promotions and hiring a higher-level skill set in certain roleseffective in 2024.January 2026.

Interest income, net. Interest income in the year ended December 31, 20242025 was $74,000 due to high interest rates on cash balances offset by interest expense of $1,000,$121,000 compared to interest income$73,000 in the year ended December 31, 2024. 2023The ofincrease $67,000was offsetdue byto higher average cash balances during the year on which interest expensewas of $3,000.earned.

Income taxes. For the year ended December 31, 2024,2025, the Company recorded an income tax benefit of $464,000, offset by current state income tax expense of $30,000, compared to an income tax benefit of $4,435,000, offset by current state income tax expense of $123,000 compared to state income tax expense$123,000, for the year ended December 31, 2023 of $9,000.2024. The change in the income tax expense benefit was primarily due to thechanges partial release ofin the Company’s valuation allowance in 2024. allowance. The recorded income tax benefit contributed $1.78 $0.19 to our basic earnings per share of $2.53$1.01, and $0.18 of our diluted earnings per share of $0.99, at December 31, 2025. At December 31, 2024, the recorded income tax benefit contributed $1.78 to our basic earnings per share of $2.53, and $1.77 of our diluted earnings per share of $2.51 at December 31, 2024.$2.51.

Net income attributable to Acorn Energy. We had net income attributable to Acorn of $6,294,000$2,510,000 in 20242025 compared to $119,000$6,294,000 in 2023.2024. Our net income in 2025 is comprised of net income at OmniMetrix of $3,488,000, corporate expense of $1,378,000, current state income tax expense of $30,000, the non-controlling interest share of our net income in OmniMetrix of $34,000 offset by deferred income tax benefit as a result of the release of our valuation allowance of $464,000. Our income in 2024 is comprised of net income at OmniMetrix of $3,027,000, corporate expense of $1,017,000, current state income tax expense of $123,000, the non-controlling interest share of our net income in OmniMetrix of $28,000$28,000, offset by deferred income tax benefit as a result of the release of our valuation allowance of $4,435,000. OurNet operating income inincreased 2023by is$100,000 comprised ofbut net income at OmniMetrix of $1,185,000, corporate expense of $1,056,000, offsetdecreased by $10,000$3,784,000 representing the non-controlling interest share of our income in OmniMetrix. The positive change in net income wasprimarily due to the increasedecrease in grossthe profitpositive as a resultimpact of the Materialvaluation Contract while managing SG&A expenses as described above.allowance.

At December 31, 2024,2025, we had working capital of $1,115,000.$3,157,000. Our working capital includes $2,326,000$4,454,000 of cash and deferred revenue of $3,521,000.$3,097,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized. Total deferred revenue decreased by $1,351,000,$824,000, from $5,584,000 at December 31, 2023 to $4,233,000 at December 31, 2024,2024 to $3,409,000 at December 31, 2025, as a result of the sales mix of products sold. Based on the current products being sold, the Company expects continued decreases in the deferred hardware revenue balance in the foreseeable future. future. Net cash increased during the year ended December 31, 20242025 by $877,000,$2,128,000, of which $905,000$2,090,000 was provided by operating activities, $33,000 $56,000 was used in investing activities, and $28,000$71,000 was provided by financing activities.

Net cash of $28,000$71,000 and $5,000$28,000 was provided by financing activities during the years ended December 31, 20242025 and 2023,2024, respectively, which represents proceeds from the exercise of stock optionsoptions, andnet warrants.of $16,000 used for stock repurchases in the year ended December 31,2025.

The following tablestable show,shows, for the periods indicated, the financial results (dollar amounts in thousands) attributable to each of our consolidated companies.

As of MarchJune 31,30, 2026, OmniMetrix had a backlog of $3,269,000,$3,236,000, primarily comprised of deferred revenue, of which $2,934,000$2,806,000 is expected to be recognized as revenue in the next twelve months. This compares to a backlog of $3,955,000$3,669,000 at MarchJune 31,30, 2025.

OmniMetrix is a Georgia limited liability company based in Buford, Georgia that develops and markets wireless remote monitoring and control systems and services for multiple markets in the IoT ecosystem: critical assets (including stand-by power generators, pumps, pumpjacks, light towers, turbines, compressors, and other industrial equipment) as well as cathodic protection for the pipeline industry (gas utilities and pipeline companies). Acorn owns 99% of OmniMetrix withnow 1%also ownedmarkets byan infrastructure solutions product line that provides smart infrastructure monitoring hardware, software and solutions for telecommunications, energy and data center infrastructure asset management in the formerNorth CEOAmerican market ofas OmniMetrix.described above.

In preparing the financial statements, management is required to make estimates and assumptions that have an impact on the asset, liability, revenue and expense amounts reported. These estimates can also affect our supplemental information disclosures, including information about contingencies, risk and financial condition. We believe, given current facts and circumstances, that our estimates and assumptions are reasonable, adhere to U.S. GAAP, and are consistently applied. Inherent in the nature of an estimate or assumption is the fact that actual results may differ from estimates and estimates may vary as new facts and circumstances arise. We make routine estimates and judgments in determining net realizable value of accounts receivable, inventories, property and equipment, prepaid expenses, product warranties and other reserves as well as the amortization period for deferred commissions payable. Management believes our most critical accounting estimates and assumptions are in the area of the valuation allowance.

The Company currently has a three-year cumulative income position which is positive evidence that it is more likely than not the deferred tax assets will be realized. As of MarchJune 31,30, 2026, we believe, based on our projections, that a partial valuation allowance of $10,326,000, continues to be necessary against our deferred tax assets. Uncertainty exists related to the generation of future hardware and monitoring revenue, nonetheless the Company believes sufficient positive evidence exists which supports the partial reversal of the valuation allowance. At this time, however, we cannot assure you that we will be successful in doing so. Accordingly, our management will continue to assess the need for this valuation allowance and will make adjustments when appropriate.

The following tabletables setsset forth certain information with respect to the unaudited condensed consolidated results of operations of the Company for the six- and three-month periods ended MarchJune 31,30, 2026 and March 31, 2025, including the percentage of total revenues during each period attributable to selected components of the operations statementstatements data and for the period-to-period percentage changes in such components. For segment data, see Notes 11 and 12 to the unaudited condensed consolidated financial statements included in this quarterly report.

*resultResult is less than 1% or not meaningful.

HardwareRevenue revenue duringfor the six- and three-month periods ended MarchJune 31,30, 2026 and 2025 is further detailed in the table below (in thousands):

PGAs hardwarediscussed above, OmniMetrix has three reportable segments, PG, CP and IS. Of the $4,716,000 in revenue decreasedrecognized $956,000,in the six-month period ended June 30, 2026, $4,450,000 was generated by PG activities and $266,000 was generated by CP activities. This represents a decrease in revenue from PG activities of $1,797,000, or 56.9%28.8%, duringfrom $6,247,000 in the first three-monthsix-month period ended MarchJune 31,30, 20262025, toand $725,000,a asdecrease comparedin revenue tofrom $1,681,000 duringCP activities of $110,000, or 29.3%, from $376,000 in the first three-monthsix-month period ended MarchJune 31,30, 2025. The IS segment remained in a pre-revenue stage and generated no revenue in either period. The decrease in PG revenue was primarily due to the sales under our Material material contractContract in the prior year period and the decrease in revenue recognized from amortization of deferred hardware, as we near the final recognition of the remaining balance of revenue that was previously deferred. PGThe monitoringdecrease in CP revenue increased $152,000, or 12.6%,was due to anfewer increaseCP hardware sales in the numbercurrent-year ofperiod connectionsas beingcompared monitoredto andthe growthprior-year in our customer base.period.

Gross Profit. Gross profit duringfor the three-monthsix-month period ended MarchJune 31,30, 2026 was $1,785,000,$3,835,000, reflecting a gross margin of 80.2% on revenue,81.3%, compared with a gross profit during the three-month period ended March 31, 2025 of $2,326,000,$4,965,000, reflecting a gross margin of 75.1%. The75.0%, gross margin increased to 80.2% infor the firstsix-month quarterperiod ofended 2026June due30, to higher monitoring revenue, which has a 94.1% gross margin, as a result of more connections.2025.

R&D expense. During the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025, R&D expense was $255,000$494,000 and $291,000,$556,000, respectively. During the three-month period ended June 30, 2026, OmniMetrix recorded $239,000 of R&D expense as compared to $265,000 in the three-month period ended June 30, 2025. The decrease in R&D expense in the three-monthsix-month period ended MarchJune 31,30, 2026 of approximately $36,000$62,000 is related to a decrease in expenses and materials paid to third-party consultants offset by salary increases granted to our engineering personnel effective effective January 1, 2026.

Selling, general and administrative expense. SG&A expense of the consolidated entities in the firstsix-month threeperiod monthsended ofJune 30, 2026 reflected an an increase of $228,000,$237,000, or 15.9%,8.3%, as compared to the firstsix-month threeperiod monthsended ofJune 30, 2025. OmniMetrix’s SG&A expense increased $51,000, $111,000, or 10.8%,2.3%, from $1,024,000$2,173,000 in the firstsix-month threeperiod monthsended ofJune 30, 2025 to $1,135,000$2,224,000 in the firstsix-month threeperiod monthsended ofJune 30, 2026. This increase was primarily due to an increase of (i) $25,000$126,000 increase in personnel expenses due to compensation increases and staff additions, (ii) $43,000$47,000 in facility expenses due to the rate increase in our office space lease which was amended June 20, 2025, (iii) $25,000 in technology expenses, primarily consulting fees for staff augmentation and special projects, (iiiiv) $27,000$24,000 in travel and trade show expenses, (iv) $26,000 in facility expenses, and an increase of (ivv) $6,000 $13,000 in other expenses in the aggregate offset by a decrease of (vvi) $16,000$184,000 in commission expenses.expenses as the prior year period was significantly higher due to the commissions earned related to the Material Contract. Corporate SG&A expense increased $117,000,$186,000, or 28.7%,27.2%, from $407,000 $685,000 in the firstsix-month threeperiod monthsended ofJune 30, 2025 to $524,000 $871,000 in the firstsix-month threeperiod monthsended ofJune 30, 2026. This increase was due to an increase of $136,000$202,000 in stock compensation expense due to a higher number of options being issued to our officers and directors in January 2026 than in historical periods and the higher stock price and related volatility offset by a net decrease of $19,000$16,000 in other public company expenses in the aggregate.expenses.

Net (loss) income attributable to Acorn Energy. We recognized a net lossincome attributable to Acorn stockholders of $77,000$217,000 in the firstsix-month threeperiod monthsended ofJune 202630, 2026, compared to net income attributable to Acorn stockholders of $464,000$1,184,000 in the firstsix-month threeperiod monthsended ofJune 30, 2025. Our net income during the three-monthsix-month period ended MarchJune 31,30, 2026 is comprised of pre-tax net income at OmniMetrix of $426,000$1,179,000 plusless afederal income tax benefittaxes of $25,000, $64,000 and state income taxes of $16,000 offset by corporate expenses, net of interest income, of $524,000,$870,000, and $4,000 representing the non-controlling interest share of our income from OmniMetrix.OmniMetrix of $12,000. Our net income during the three-monthsix-month period ended MarchJune 31,30, 2025 is comprised of pre-tax net income at OmniMetrix of $1,034,000 $2,285,000 less federal and stateincome taxes of $154,000,$337,000 inand thestate aggregate,income taxes of $59,000 offset by corporate expenses, net of interest income, of $406,000,$681,000, and $10,000 representing the non-controlling interest share of our income from OmniMetrix.OmniMetrix of $22,000.

At MarchJune 31,30, 2026, we had working capital of $3,115,000.$3,688,000. Our working capital includes $4,257,000$4,478,000 of cash and deferred revenue of $2,934,000.$2,722,000. Such deferred revenue does not require a significant cash outlay for the revenue to be recognized.

The Company expects that its existing cash as of MarchJune 31,30, 2026 of $4,257,000$4,478,000 will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of these financial statements.

The table below provides information concerning obligations under certain categories of our contractual obligations as of MarchJune 31,30, 2026.

*Reflects the gross amount of the payments to be made under the operating lease liabilities. Imputed interest is $150,000 resulting in $163,000 included in current liabilities. Does not include rent amounts to be received under the sublease.