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) February 24,
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 Road, 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
7 – Regulation FD
Item
7.01 Regulation FD Disclosure.
On
February 24, 2010, the Company issued a press release announcing its strategic
investment in US Sensor Systems Inc.. The press release is filed as
Exhibit 99.1 hereto.
Section
8 – Other Events
Item
8.01 Other Events.
SEC
Inquiry Regarding Comverge Share Transactions
The
Company and its Chairman and Chief Executive Officer, John A. Moore, have
received subpoenas from the staff of the Securities and Exchange Commission (the
“SEC”) for information about their transactions in the shares of Comverge, Inc.
from January 1, 2008 through October 31, 2008. The SEC staff has advised the
Company that issuance of the subpoenas should not be construed as an indication
by the SEC staff that any violation of the law has occurred, nor should it be
considered a reflection upon any person, entity or security.
The
Company believes that all of its and Mr. Moore’s transactions in Comverge shares
were made in full compliance with all laws. The Company and Mr. Moore have
responded to the SEC staff and are committed to responding fully to any
inquiries of the SEC staff. In the course of
responding to the SEC staff's inquiry, the Company's counsel has not
identified any information indicating that the transactions in Comverge stock by
the Company or Mr. Moore were in violation of any applicable
laws.
Option
to Purchase Shares of US Sensor Systems Inc.
On
February 23, 2010, the Company entered into an option agreement with US Sensor
Systems Inc., or USSI, a company which designs, integrates, manufactures, and
sells fiber optic sensing systems and solutions for the energy, defense and
security markets, and a related option agreement with certain stockholders of
USSI. The Company currently owns 146,386 shares of USSI’s common
stock which the Company purchased for $500,000 and which represents
approximately 10.0% of USSI’s fully diluted capitalization.
Under the
terms of the option agreement with USSI, the Company has the right to acquire up
to an additional 159,115 shares of USSI’s common stock for a purchase price of
$500,000. The Company has the right to acquire 63,646 of these shares
under the option in consideration for payment of $200,000 on or before May 31,
2010. If the Company exercises this installment, it has the right to
acquire the remaining 95,469 shares under the option on or before August 27,
2010 in consideration for payment of $300,000.
Under the
Company’s agreement with certain of USSI’s stockholders, the Company has the
right to acquire 516,378 shares of USSI common stock held by such
stockholders in consideration for payment to them of $2,111,986 on or
before August 27, 2010. The purchase price is payable in the
Company’s common stock which shall be priced on the basis of the volume weighted
average of the Company’s common stock on the 20 trading days ending on the day
that is five days preceding the date that the Company exercises its option to
acquire the shares of the USSI stockholders. The shares of the
Company’s common stock that are issued to the USSI stockholders in consideration
for their shares would be restricted securities under Securities Act of 1933 and
would be subject to a lock-up by certificate legend. The shares would
be released from the lock-up over a one year period, with 25% being released
each three months. If the Company exercises the options described in this and in
the preceding paragraph, the Company would own common stock of USSI representing
approximately 51% of USSI’s fully diluted capitalization.
Under the
agreement with USSI, if the Company exercises the options to acquire USSI’s
common stock described in the two preceding paragraphs, the Company would have
the right to acquire 1,693,391 additional shares of USSI’s common stock from
USSI on or before November 30, 2010 in consideration for payment of
$1,500,000. If the Company exercises this option, it would have the
right to acquire 1,693,391 additional shares of common stock from USSI on or
before May 30, 2011 in consideration for payment of $1,500,000.
If the
Company purchases all of the USSI common stock it is entitled to purchase under
the agreements, the Company would hold USSI shares representing approximately
84% of USSI’s fully diluted capitalization.
Proposed
Acquisition of GridSense
As
previously announced, on November 4, 2009 the Company entered into a binding
letter of intent with GridSense Pty Ltd and the principal stockholders of
GridSense to acquire all of the outstanding shares of GridSense that the Company
does not already own. The Company currently own 15,714,285 shares of
GridSense representing 31% of GridSense’s outstanding
shares. Immediately prior to the completion of the acquisition, the
Company intends to convert a Gridsense promissory note in the principal amount
of approximately $730,000 plus accrued interest thereon into approximately
8,861,096 GridSense shares which, after giving effect to other simultaneous
issuances of GridSense shares, will result in the Company owning 24,575,381
shares of GridSense representing approximately 40.6% of GridSense’s outstanding
shares.
Under the
terms of the transaction, the Company will acquire the outstanding GridSense
shares that are not owned by the Company in consideration for 440,894 shares of
the Company’s common stock. Under the letter of intent these shares were at the
time valued at $5.91 per share which was the volume weighted average of the
Company’s common stock for the 20 trading days preceding October 16,
2009. In addition, the Company will acquire $1,128,339 principal
amount of promissory notes of GridSense at a price equal to the principal amount
plus accrued interest. Under the letter of intent, 50% of the
purchase price of the notes would be paid in cash and 50% would be paid
in shares of the Company’s common stock, valued at $5.91 per share,
which would result in the issuance of approximately 150,000 shares of
the Company’s common stock. In addition, the Company agreed to provide to
Gridsense at closing with approximately $600,000 to be used to pay a shareholder
loan.
Under the
letter of intent, the Company has also agreed to pay an earn-out to the
shareholders of GridSense as part of the consideration for their
shares. To the extent that GridSense’s calendar year 2010 sales
exceed $4,383,720, the Company will pay the GridSense shareholders an amount
equal to 50% of that excess, up to $2,435,400, multiplied by .5954 (representing
their ownership interest in GridSense) for a maximum earn-out of
$1,449,799. The Company has the option of paying any earn-out in cash
and/or shares of the Company’s common stock. If the Company uses
shares as all or part of the payment, each share would be valued as the volume
weighted average price of the Company’s common stock on the 20 trading days
preceding the date of the issuance of the auditor’s report relating to the
Company’s 2010 financial statements.
The
Company’s shares of common stock which are issued in consideration for acquiring
GridSense’s shares and debt, including any shares issued in payment of the
earn-out, will be subject to an escrow for possible indemnity claims
and a lock-up, with 50% of the shares released after six months and the balance
one year after issuance.
When the
Company signed the letter of intent, the Company loaned GridSense $550,000 which
accrues interest at 8% per annum and is due in October 2011. If the
transaction to acquire GridSense does not close or is terminated, the Company
may declare the unpaid principal and accrued interest on that note (as well as
$730,000 of principal amount of GridSense notes that the Company holds plus
accrued interest) immediately due and payable and the Company has the right to
convert such indebtedness into shares of GridSense.
If the
GridSense acquisition is completed, the Company has agreed to provide GridSense
with up to $2,000,000 in working capital which may be in the form of debt or
equity.
Definitive
documentation for the GridSense acquisition is being prepared and the
transaction is expected to close by March 12, 2010.
Section
9 – Financial Statements and Exhibits
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 February 24,
2010
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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 24th day of February, 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, Secretary and General
Counsel
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