UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported) November 8,
2010
ACORN
ENERGY, INC.
(Exact
name of Registrant as Specified in its Charter)
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Delaware
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0-19771
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22-2786081
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(State
or Other Jurisdiction
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(Commission
file Number)
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(IRS
Employer
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of
Incorporation)
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Identification
No.)
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4 West Rockland, Montchanin,
Delaware
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19710
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (302)
656-1707
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-2 under the Exchange Act (17 CFR
240.14a-2)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
1 – Registrant’s Business and Operations
Item
1.01 Entry into a Material Definitive
Agreement
On
November 9, 2010, Acorn Energy, Inc. (the “Company”) entered into a letter of
intent (the “Letter of Intent”) with Coreworx Inc., a wholly-owned subsidiary of
the Company (“Coreworx”), for the Company to sell all of its common stock in
Coreworx to a management buyout group consisting of Coreworx’ management and
certain employees and other investors. Under the terms of the Letter
of Intent: Coreworx’ remaining indebtedness owed to the Company of
approximately $5.4 million will be reduced by approximately $1.4 million to $4.0
million in consideration of the Company receiving at closing 10% of the
outstanding shares of common stock of Coreworx (“New Coreworx Shares”); the
Company will receive at closing warrants to acquire that number of additional
shares of common stock of Coreworx equal to the number of New Coreworx Shares;
the debt of $4.0 million owed by Coreworx to the Company (the “Coreworx Debt”)
will be non-interest bearing, and the first payment will be due January 31,
2012; the Coreworx Debt will be repaid in an amount equal to 4% of Coreworx’
gross revenues commencing at the date of closing, and payments for the period
commencing on the closing date through December 31, 2011 will be paid in 12
equal monthly installments starting on January 31, 2012 and on the last day of
each of the following 11 months; the payments of the Coreworx Debt for revenue
periods subsequent to Coreworx’ 2011 fiscal year will be payable on a quarterly
basis within 45 days following the end of Coreworx’ fiscal quarter-end periods;
following repayment of the Coreworx Debt, Coreworx will pay the Company a
royalty fee (the “Royalty”) equal to 4% of Coreworx’ gross revenues up to a
maximum amount of $20 million; the Royalty will be paid on a quarterly basis
within 45 days following the end of Coreworx’ fiscal quarter-end periods; and
Coreworx will pay the Company a restructuring fee of $40,000 on or before July
1, 2011.
Repayment
of the Coreworx Debt will be secured by a security interest in Coreworx’
intellectual property on a pari passu basis with the
other holders of Coreworx’ common stock following closing which will necessitate
the Company releasing its present security interest in Coreworx’ other personal
property and intangibles at closing.
The
Letter of Intent is binding, and is conditional upon, among other things,
execution and delivery of the definitive transaction documents, Coreworx raising
capital of a minimum of CDN$3 million on or before November 30, 2010 and
approval of the transaction documents by the Company’s Board of
Directors. Upon satisfaction of such conditions, closing is to occur
on or before December 15, 2010.
Item
2.02 Results of Operations and Financial Condition
On
November 10, 2010, the Company issued a press release announcing its 2010 third
quarter results. The press release is filed as Exhibit 99.1 hereto.
Section
2 – Financial Information
Item
2.06 Material Impairment
In
connection with the sale of the Company’s shares of common stock of Coreworx
under the terms of the Letter of Intent, management of the Company determined on November 8,
2010 that a material impairment of the Company’s goodwill and other intangible
assets related to Coreworx will be taken by December 31, 2010. The
Company estimates the pre-tax, non-cash charges relating to the foregoing
impairment will be approximately $9.4 million, which represents the current book
value of the goodwill and other intangible assets related to
Coreworx. The impairment charges are not expected to result in future
cash expenditures. Coreworx losses will be presented as a Loss from Discontinued
Operations in future periods.
Section
5 – Corporate Governance and Management
Item
5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On
November 8, 2010, John A. Moore, President and CEO of the Company announced to
the Company’s Board of Directors that he is voluntarily reducing his current
annual base salary of $375,000 to $300,000, a 20% reduction, commencing with the pay
period beginning November 1, 2010 and continuing for an indefinite period of
time. No other adjustments are being made to Mr. Moore’s
compensation.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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99.1
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Press
Release dated November 10,
2010
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized on this 11th day
of November, 2010.
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ACORN
ENERGY, INC.
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By:
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/s/ Joe B. Cogdell, Jr.
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Name:
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Joe
B. Cogdell, Jr.
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Title:
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Vice
President, General Counsel &
Secretary
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