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STOCKHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 9—STOCKHOLDERS’ EQUITY

 

(a) General

 

At March 31, 2026, Acorn had 2,557,937 shares issued and 2,506,846 shares outstanding of its common stock, par value $0.01 per share. Holders of outstanding common stock are entitled to receive dividends when and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company.

 

The Company is not authorized to issue preferred stock. Accordingly, no preferred stock is issued or outstanding.

 

(b) Summary Employee Option Information

 

The Company’s stock option plans provide for the grant to officers, directors and employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money” at the end of the option term, it is automatically exercised “net.” In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the option holder but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable for one share of the Company’s common stock. Most options expire within five to ten years from the date of the grant and generally vest over a three-year period from the date of the grant.

 

At March 31, 2026, 735 options were available for grant under the Amended and Restated 2006 Stock Incentive Plan, and no options were available for grant under the 2006 Stock Option Plan for Non-Employee Directors. During the three-month period ended March 31, 2026, 62,500 options were issued. The options were issued as follows: an aggregate of 12,500 to directors (excluding the CEO), 25,000 to the CEO and 25,000 to the CFO. In the three-month period ended March 31, 2026, there were no grants to non-employees (other than the directors, CEO and CFO).

 

During the three-month period ended March 31, 2026, 2,220 options were exercised. The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the respective years (all in weighted averages):

 

  

Number

of Options

(in shares)

  

Weighted

Average

Exercise

Price Per
Share

   Weighted
Average
Remaining
Contractual Life		  Aggregate
Intrinsic
Value		 
Outstanding at December 31, 2025   63,311   $7.73   3.3 years  $476,000 
Granted   62,500    19.02         
Exercised   (2,220)   4.99         
Outstanding at March 31, 2026   123,591   $13.49   5.0 years  $556,000 
Exercisable at March 31, 2026   67,038   $9.05   3.5 years  $543,000 

 

The fair value of the options granted during the three-month period ended March 31, 2026 was estimated to be $841,000 on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

 

Risk-free interest rate   3.86%
Expected term of options   5.5 years 
Expected annual volatility   83.8%
Expected dividend yield   —%

 

(c) Stock Option Compensation Expense

 

Stock option compensation expense included in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations was $197,000 and $61,000 for the three-month periods ended March 31, 2026 and 2025, respectively.

 

The total compensation cost related to non-vested awards not yet recognized was $653,000 as of March 31, 2026 which will be recognized over the next eleven quarters.