SEGMENT REPORTING

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 10— SEGMENT REPORTING

(a) General Information

As of March 31, 2025, the Company operates in two reportable operating segments, both of which are performed through the Company’s OmniMetrix subsidiary:

● Power Generation (“PG”). OmniMetrix’s PG services provide wireless remote monitoring and control systems and IoT applications for residential and commercial/industrial power generation equipment. This includes OmniMetrix’s TrueGuard power generator monitors and AIRGuard product, which remotely monitors and controls industrial air compressors, and its Smart Annunciator product, which is typically sold to commercial customers that require a visual representation of the generator’s status and has a touchscreen display that indicates the current state of that generator.

● Cathodic Protection (“CP”). OmniMetrix’s CP services provide remote monitoring and control products for cathodic protection systems on gas pipelines serving the gas utilities market and pipeline operators. The CP product lineup includes solutions to remotely monitor and control rectifiers, test stations and bonds. OmniMetrix also offers the industry’s first RAD^TM (Remote AC Mitigation Disconnect) that mounts onto existing Solid-state Decouplers in the field and can remotely disconnect/connect these AC mitigation tools, which can drastically reduce a company’s expense while increasing employee safety.

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.

The CODM is the Company’s Chief Executive Officer (CEO).

(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 by segment based on revenue (driven by the number of connections), gross profit and 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.

Segment expenses that are routinely provided to the CODM are COGS and R&D expense. R&D expense may be allocated to each segment based on the percentage of segment revenue to total revenue or based on estimated time on dedicated projects within the segment. SG&A expense and interest income is allocated to each segment based on the percentage of segment revenue to total revenue instead of being specifically identified to each segment since the Company’s resources have a high level of shared utilization between the segments. Further, the CODM does not review the assets by segment.

The following tables represent segmented data for the three-month periods ended March 31, 2025 and 2024 (in thousands):

	PG		CP			Total
Three months ended March 31, 2025:
Revenues from external customers	$	2,887	$	211		$	3,098
COGS		697		75			772
Segment gross profit		2,190		136			2,326
R&D expense		271		20			291
SG&A expense		954		70			1,024
Segment operating income		965		46			1,011
Interest income, net		22		1			23
Segment income before income taxes	$	987	$	47		$	1,034
Three months ended March 31, 2024:
Revenues from external customers	$	1,794	$	338		$	2,132
COGS		396		145			541
Segment gross profit		1,398		193			1,591
R&D expense		179		59			238
SG&A expense		816		154			970
Segment operating income (loss)		403		(20	)		383
Interest income, net		13		2			15
Segment income (loss) before income taxes	$	416	$	(18	)	$	398

Reconciliation of Segment Net Income to Consolidated Net Income Before Income Taxes

	Three months ended March 31,
	2025			2024
	(in thousands)
Total net income before income taxes for reportable segments	$	1,034		$	398
Unallocated cost of corporate headquarters		(406	)		(305	)
Consolidated net income before income taxes	$	628		$	93