Acorn Energy (NASDAQ: ACFN), an energy technology holding company, has stopped funding its majority-owned US Seismic Systems (USSI) subsidiary, and USSI has suspended operations and terminated substantially all employees.
USSI intends to sell its assets and is exploring ways to maximize value for creditors and other stakeholders, expecting that most of the proceeds from any sale of its assets will be used to pay creditors. It is uncertain whether there will be any proceeds available to Acorn Energy or other USSI shareholders.
Acorn will record write-offs on its 2014 financial statements of substantially all USSI assets, including $4.9 million of inventory, $3.4 million of goodwill and intangibles, and $1.0 million of fixed assets.
John A. Moore, CEO of Acorn Energy, said, "While we continue to believe in the value of USSI's technology, we had never planned to go it alone in developing and bringing the technology to market. The current downturn of the oil industry has caused all of our potential partners to shift from adopting cutting-edge microseismic technology to concentrate on rightsizing their organizations in line with the decreasing microseismic demand. Therefore, we made the hard but necessary decision to end the drain on Acorn's resources and cut overall burn rate by discontinuing our funding of USSI.
"Our board has decided to focus on our businesses that are showing substantial potential. We believe that defunding USSI and focusing our efforts on our other businesses will allow us to get back to what we do best."