Unassociated Document
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) December 17,
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., then 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. On December 17,
2010, the Company and Coreworx entered into agreements to effectuate the terms
of the Letter of Intent and close on the transactions described therein, which
agreements included a Share Exchange Agreement, Debt Conversion Agreement,
Amended and Restated Loan Agreement and other ancillary agreements and documents
(collectively the “Transaction Documents”). Under the terms of the
Transaction Documents: Coreworx’ remaining indebtedness owed to the
Company of approximately $5.4 million was reduced by approximately $1.4 million
to $4.0 million; the Company exchanged all of its shares of common stock of
Coreworx for 10% of the newly issued and outstanding shares of common stock of
Coreworx with such shares received by the Company being non-voting shares (“New
Coreworx Shares”); the Company received 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”) is non-interest bearing, and the first payment will be due
January 31, 2012; the Coreworx Debt is to 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 are to 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 is to 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 is to be paid on a quarterly
basis within 45 days following the end of Coreworx’ fiscal quarter-end periods;
and Coreworx is to pay the Company a restructuring fee of $40,000 on or before
July 1, 2011.
Repayment
of the Coreworx Debt is 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 necessitated the Company releasing at closing its prior security
interest in Coreworx’ other personal property and intangibles.
Item
2.01 Completion of Acquisition or Disposition of
Assets
Item 1.01
above is incorporated by reference herein in its entirety.
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 22nd day of
December, 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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