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STOCKHOLDERS’ EQUITY
 9 Months Ended
Sep. 30, 2026
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 9— STOCKHOLDERS’ EQUITY

 

(a) General

 

At September 30, 2026, Acorn had 2,585,805 shares issued and 2,534,714 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.

 

On August 17, 2026, Acorn entered into a letter agreement with Walter Czarnecki, the former Chief Executive Officer of OmniMetrix, under which Mr. Czarnecki exchanged the 100 shares of Series A preferred stock of OMX Holdings, Inc. (“OMX”) held by him, together with all of his other rights in the equity of OMX, including accrued and unpaid dividends of approximately $28,500 on those shares, for 25,096 shares of Acorn common stock (the “Share Exchange”). No cash was exchanged. The shares were issued in a private transaction exempt from registration under the Securities Act of 1933, as amended, and are “restricted securities.” Following the Share Exchange, OMX (which holds 100% of the equity interests of OmniMetrix) is wholly owned by Acorn, and the Company no longer has any non-controlling interest. Because Acorn retained control of OMX, the Share Exchange was accounted for as an equity transaction under ASC 810, Consolidation. The non-controlling interest, calculated through the date of the agreement, was eliminated, and no gain or loss was recognized.

 

(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.

 

On September 16, 2026, the Company’s stockholders approved the Acorn Energy, Inc. 2026 Stock Incentive Plan (the “2026 Plan”) at the Company’s Annual Meeting of Stockholders. The 2026 Plan permits the grant of cash-based awards, nonqualified and incentive stock options, share appreciation rights, restricted shares, restricted share units, performance shares, performance units and other share-based awards to officers, employees, directors and third-party service providers of the Company and its existing or future subsidiaries. Subject to adjustment as provided in the 2026 Plan, a maximum of 200,000 shares of common stock is authorized for issuance under the 2026 Plan. Options granted under the 2026 Plan must have an exercise price of not less than 100% of the fair market value of the common stock on the date of grant and may not be exercised later than the tenth anniversary of the date of grant. Unless sooner terminated, the 2026 Plan will terminate on December 31, 2036.

 

At September 30, 2026, 200,000 shares were available for grant under the 2026 Plan, and 1,924 options were available for grant under the Amended and Restated 2006 Stock Incentive Plan (the “2006 Plan”), and no options were available for grant under the 2006 Stock Option Plan for Non-Employee Directors. During the nine-month period ended September 30, 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 nine-month period ended September 30, 2026, there were no grants to non-employees (other than the directors, CEO and CFO). No options were issued during the three-month period ended September 30, 2026.

 

 

During the nine- and three-month periods ended September 30, 2026, 4,992 and 0 options were exercised, respectively. 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         
Cancelled/expired   (1,189)   4.84         
Exercised   (4,992)   4.89         
Outstanding at September 30, 2026   119,630   $13.77   4.6 years  $833,000 
Exercisable at September 30, 2026   77,866   $11.12   3.8 years  $749,000 

 

The fair value of the options granted during the nine-month period ended September 30, 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 $398,000 and $126,000 for the nine-month periods ended September 30, 2026 and 2025, respectively, and $102,000 and $33,000 for the three-month periods ended September 30, 2026 and 2025, respectively.

 

The total compensation cost related to non-vested awards not yet recognized was $453,000 as of September 30, 2026 which will be recognized over the next eight quarters.