REVENUE

3 Months Ended

Mar. 31, 2025

Revenue from Contract with Customer [Abstract]

REVENUE

NOTE 11—REVENUE

Prior to September 1, 2023, sales of OmniMetrix equipment typically did not qualify as a separate unit of accounting. As a result, revenue (and related costs) associated with sale of equipment was recorded to deferred revenue (and deferred cost of goods sold) upon shipment of PG and CP monitoring units. Revenue and related costs with respect to the sale of equipment were recognized over the estimated life of the units which was estimated to be three years. On September 1, 2023, OmniMetrix launched an updated version of its products that includes new functionality in its TrueGuard, AIRGuard, Patriot and Hero products that allows its customers to have options as it relates to obtaining and utilizing the data that is provided by its hardware devices. This new functionality allows for SIM card options, configuration options regarding IP address endpoints and DNS routes, and access to OmniMetrix’s over-the-air data protocol. This product update allows customers to have the option to purchase OmniMetrix’s monitoring service, monitor the products themselves if they have the ability in-house, or choose another monitoring provider if they so desire. OmniMetrix’s prior hardware product version could not function as a distinct product independent from its monitoring services. This new version’s functionality results in OmniMetrix’s hardware and monitoring services being capable of being two distinct products and services. OmniMetrix recognizes revenue, COGS and commissions from the sale of the new version of its hardware products when the product is shipped rather than over the estimated time that the unit is in service for the customer. The remaining balance of deferred hardware revenue from the prior version of these products will continue to be amortized each period until it is fully amortized. The modifications to the circuit boards and embedded firmware of hardware enclosures in inventory as of August 31, 2023 were made such that only the new version of these products was sold subsequent to that date.

The following table disaggregates the Company’s revenue for the three-month periods ended March 31, 2025 and 2024 (in thousands):

	Hardware		Monitoring		Total
Three months ended March 31, 2025:
PG Segment	$	1,681	$	1,206	$	2,887
CP Segment		148		63		211
Total Revenue	$	1,829	$	1,269	$	3,098

	Hardware		Monitoring		Total
Three months ended March 31, 2024:
PG Segment	$	753	$	1,041	$	1,794
CP Segment		277		61		338
Total Revenue	$	1,030	$	1,102	$	2,132

Deferred revenue activity for the three-month period ended March 31, 2025 can be seen in the table below (in thousands):

	Hardware			Monitoring			Total
Balance at December 31, 2024	$	1,124		$	3,109		$	4,233
Additions during the period		—			1,306			1,306
Recognized as revenue		(315	)		(1,269	)		(1,584	)
Balance at March 31, 2025	$	809		$	3,146		$	3,955
Amounts to be recognized as revenue in the twelve-month-period ending:
March 31, 2026	$	751		$	2,643		$	3,394
March 31, 2027		58			500			558
March 31, 2028 and thereafter		—			3			3
	$	809		$	3,146		$	3,955

The amount of hardware revenue recognized during the three-month period ended March 31, 2025 that was included in deferred revenue at the beginning of the fiscal year was $315,000. The amount of monitoring revenue during the three-month period ended March 31, 2025 that was included in deferred revenue at the beginning of the fiscal year was $1,100,000.

The following table provides a reconciliation of the Company’s hardware revenue for the three-month periods ended March 31, 2025 and 2024 (in thousands):

	Three months ended March 31,
Reconciliation of Hardware Revenue	2025		2024
Amortization of deferred revenue	$	315	$	535
Sales of custom designed units and related accessories		58		—
Hardware sales (new product versions)		1,352		376
Other accessories, services, shipping and miscellaneous charges		104		119
Total hardware revenue	$	1,829	$	1,030

Deferred COGS relate only to the sale of equipment. Deferred COGS activity for the three-month period ended March 31, 2025 can be seen in the table below (in thousands):

Balance at December 31, 2024	$	476
Additions, net of adjustments, during the period		—
Recognized as COGS		(135	)
Balance at March 31, 2025	$	341
Amounts to be recognized as COGS in the twelve-month-period ending:
March 31, 2026	$	316
March 31, 2027		25
	$	341

The following table provides a reconciliation of the Company’s COGS expense for the three-month periods ended March 31, 2025 and 2024 (in thousands):

	Three months ended March 31,
Reconciliation of COGS Expense	2025		2024
Amortization of deferred COGS	$	135	$	235
COGS of custom designed equipment sold with no monitoring		16		—
COGS of hardware sales (new product versions)		469		163
Data costs for monitoring		74		62
Other COGS of accessories, services, shipping and miscellaneous charges		78		81
Total COGS expense	$	772	$	541

The following table provides a reconciliation of the Company’s sales commissions contract assets for the three-month period ended March 31, 2025 (in thousands):

	Hardware			Monitoring			Total
Balance at December 31, 2024	$	104		$	124		$	228
Additions during the period		—			14			14
Amortization of sales commissions		(29	)		(13	)		(42	)
Balance at March 31, 2025	$	75		$	125		$	200

The capitalized sales commissions are included in other current assets ($120,000) and other assets ($80,000) in the Company’s unaudited condensed consolidated balance sheet at March 31, 2025. The capitalized sales commissions are included in other current assets ($137,000) and other assets ($91,000) in the Company’s condensed consolidated balance sheet at December 31, 2024.

Amounts to be recognized as sales commission expense in the twelve-month-period ending (in thousands):

March 31, 2026	$	120
March 31, 2027		45
March 31, 2028 and thereafter		35
	$	200