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STOCKHOLDERS’ EQUITY (DEFICIT)
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY (DEFICIT)

NOTE 8—STOCKHOLDERS’ EQUITY (DEFICIT)

 

(a) General

 

At September 30, 2024, Acorn had 2,537,485 shares issued and 2,487,307 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 optionee 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 September 30, 2024, 69,973 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 nine-month period ended September 30, 2024, 7,900 options were issued of which all were issued in the three-month period ended March 31, 2024. No options were issued in the three-month period ended September 30, 2024. The options were issued as follows: an aggregate of 2,500 to directors (excluding the CEO), 2,200 to the CEO, 2,200 to the CFO and an aggregate of 1,000 to employees. In the nine- and three-month periods ended September 30, 2024, there were no grants to non-employees (other than the directors, CEO and CFO).

 

During the nine- and three-month periods ended September 30, 2024, 2,812 options were exercised, all of which were exercised in the three-month period ended March 31, 2024. No options were exercised in the three-month period ended September 30, 2024. 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, 2023   71,893   $6.41    3.8 years   $40,000 
Granted   7,900    6.08           
Exercised   (2,812)   5.12           
Forfeited or expired   (1,104)   5.67           
Outstanding at September 30, 2024   75,877   $6.43    3.5 years   $251,000 
Exercisable at September 30, 2024   69,341   $6.47    3.3 years   $227,000 

 

The fair value of the options granted of $47,000 during the nine-month period ended September 30, 2024 was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

 

Risk-free interest rate   3.9%
Expected term of options   4.9 years 
Expected annual volatility   194.1%
Expected dividend yield   —%

 

 

(c) Stock-based Compensation Expense

 

Stock-based compensation expense included in selling, general, and administrative expense in the Company’s unaudited condensed consolidated statements of operations was $52,000 and $46,000 for the nine-month periods ended September 30, 2024 and 2023, respectively, and $14,000 and $16,000 for the three-month periods ended September 30, 2024 and 2023, respectively.

 

The total compensation cost related to non-vested awards not yet recognized was $17,000 and $17,000 as of September 30, 2024 and 2023, respectively.